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In partnership with
April 1, 2011 The State of Oklahoma
Information Technology and Telecommunications Transfer, Coordination, and Modernization Study Phase 1—Assessment
Developed by:
Capgemini Government Solutions LLC
In partnership with:
The Chief Information Officer
The Information Services Division of the Office of State Finance Preface
The 2009 Oklahoma State Legislature passed House Bill 1170—the Oklahoma Information Services Act—and created the position of Chief Information Officer (CIO), appointed by the Governor, to also serve as Secretary of Information Technology and Telecommunications, with jurisdictional responsibility related to the information technology and telecommunications systems of all State agencies.
House Bill 1170 also stated that within 12 months of appointment, the first CIO should complete, for all State agencies:
a.
An assessment of the existing and planned information technology and telecommunication systems (including but not limited to hardware, software, contracts, personnel, capabilities, facilities, networks, current and planned projects, and budgets).
b.
An assessment of the implementation of the transfer, coordination, and modernization of all information technology and telecommunications systems.
This document presents the Phase 1 assessment. The key short- and long-term objectives of this assessment are to build upon and transform the State’s current information technology- and telecommunications-related organizations, structures, technologies, capabilities, processes, facilities, practices, tools, standards, architectures, supply chain relationships, and workforce. State IT and Telecommunications Modernization—Phase 1—Assessment | i
The State of Oklahoma | Capgemini Government Solutions
Table of Contents
1
Introduction
................................................................................................
1-1
2
Executive Summary
...................................................................................
2-1
3
Approach and Current Situation
.............................................................
3-1
3.1
Approach
...............................................................................................
3-1
3.2
Current IT Environment
........................................................................
3-3
3.2.1
Current State Analysis—Operations
..............................................
3-4
3.2.2
Current State Analysis—Applications
...........................................
3-5
3.2.3
Current State Analysis—Telecommunications and Network
........
3-8
3.2.4
Current State Analysis—Infrastructure
..........................................
3-9
3.3
Financial Observations
........................................................................
3-13
3.4
Human Capital/Operations
..................................................................
3-15
4
Portfolio of Improvements
........................................................................
4-1
4.1
Leading Practices
..................................................................................
4-1
4.2
Key Improvement Opportunities
...........................................................
4-3
4.2.1
Operations
......................................................................................
4-3
4.2.2
Applications
.................................................................................
4-20
4.2.3
Telecommunications
....................................................................
4-30
4.2.4
Infrastructure
................................................................................
4-36
5
Organizational Improvements
..................................................................
5-1
5.1
Proposed ISD Functional Organizational Model
..................................
5-2
5.2
IT Governance Model
...........................................................................
5-3
5.3
Centralized Enterprise Infrastructure/Shared Services Model
..............
5-5
5.4
The Agency-driven Governance Model
................................................
5-7
5.4.1
Implement State-wide Portfolio and Project Management
............
5-8
5.4.2
Operationalize IT Governance
.......................................................
5-9
5.4.3
Enact Recommended Organizational Changes
............................
5-11
5.4.4
IT Governance Communication
...................................................
5-11
5.4.5
Link Enterprise Architecture to the IT Governance Framework . 5-13
State IT and Telecommunications Modernization—Phase 1—Assessment | ii
6
The State of Oklahoma | Capgemini Government Solutions
Recommendations/Roadmap
....................................................................
6-1
6.1
Phase 0—Immediate Needs (FY2011)
..................................................
6-1
6.2
Phase 1—Organizational and Key Infrastructure Initiatives (FY2012) 6-2
6.3
Phase 2—Mid-Term Implementations (FY2013)
.................................
6-3
6.4
Phase 3—Closure and Next Steps (FY2014)
........................................
6-4
Appendices .......................................................................................................... A-i
Appendix A—Infrastructure Findings,Trends, and Recommendations
.........
A-1
Appendix B—Data Network and Telecommunications Findings, Trends, and
Recommendations
...........................................................................................
B-1
Appendix C—Applications Blueprint
............................................................
C-1
Appendix D—Operations Findings, Trends, and Recommendations
.............
D-1
Appendix E—Governance Recommendations
................................................
E-1
Appendix F—Supporting Financial Data
........................................................
F-1
Appendix G—Survey/Scan
.............................................................................
G-1
State IT and Telecommunications Modernization—Phase 1—Assessment | iii
The State of Oklahoma | Capgemini Government Solutions
Table of Figures
Figure 2-1. Net Savings by Area Initiative and Operating Recommendations
....
2-3
Figure 2-2. Estimated Investment and Cost Savings
...........................................
2-7
Figure 2-3. High-Level Implementation Roadmap
..............................................
2-9
Figure 2-4. Summary of Impacts
.........................................................................
2-9
Figure 3-1. Manual Survey Response Tracking
..................................................
3-1
Figure 3-2. Survey Tracker—Qualitative Statistics—Tier 1
...............................
3-2
Figure 3-3. Oracle Insight Initiatives
...................................................................
3-7
Figure 3-4. Summary Infrastructure Current State
............................................
3-12
Figure 3-5. 2009 Actual Expenditures and 2011 Headcounts and Costs
...........
3-13
Figure 3-6. Budget to Actual Comparison FY2009 and FY2010
......................
3-14
Figure 3-7. Comparison of Planned vs. Actual Expenditures FY2009
..............
3-14
Figure 4-1. Systems Management Framework
....................................................
4-3
Figure 4-2. IT Operations Estimated Investment and Cost Savings
....................
4-5
Figure 4-3. Applications Estimated Investment and Cost Savings
....................
4-22
Figure 4-4. Before and After Telecommunications Network (Oregon)
............
4-32
Figure 4-5. Telecommunication Estimated Investment and Cost Savings
........
4-35
Figure 4-6. Agency Bundles
..............................................................................
4-38
Figure 4-7. E-mail Summary, Recommendations and Benefits
........................
4-43
Figure 4-8. Compute Optimization Findings and Recommendations
...............
4-46
Figure 4-9. Storage Transformation Findings and Recommendation Summary 4-48
Figure 4-10. Infrastructure Estimated Investment and Cost Savings
................
4-50
Figure 5-1. IT Governance Organizational Structure
..........................................
5-1
Figure 5-2. ISD Functional Organization Model
.................................................
5-3
Figure 5-3. IT Governance Model
.......................................................................
5-4
Figure 5-4. Decision Making Process
..................................................................
5-8
Figure 5-5. Estimated Investment for Governance Implementation
..................
5-15
Figure 6-1. Roadmap/Master Plan
.......................................................................
6-1
Figure 6-2. Prioritized Roadmap
..........................................................................
6-2
The State of Oklahoma | Capgemini Government Solutions
State IT and Telecommunications Modernization—Phase 1—Assessment | 1-1
1 Introduction
House Bill 1170 created the first State-wide position of CIO and Secretary of Information Technology. It also necessitated a comprehensive assessment of the State-wide use of information technology and telecommunications systems to develop practical short- and long-term plans for modernization of State systems, infrastructure, and services.
The State of Oklahoma (“the State”) is facing a budget deficit estimated at $600 million as it begins the process of preparing the FY2012 budget. This represents a shortfall of 11.3 percent of the FY2011 budget. State agencies are being directed to prepare plans to reduce their costs by 3 to 5 percent. To help reduce ongoing costs, the State needs to identify improvements to the way it conducts its business and provides services to its constituents (citizens, the State business community, and workers). There needs to be a view to a long-term solution generated by significant productivity gains and enhancements that will offset State budget reductions while providing ongoing savings and cost containment.
The State—like many other states, cities, and counties—typically implements a wide-ranging, wholesale headcount and/or expense reduction approach for most of its initial cost cutting. It does achieve immediate results, but only for the short-term. This is because the systemic causes of the rising costs are not evaluated and addressed.
The solution, in part, is the use of technology to automate, standardize, simplify and provide accessibility to the State’s diverse constituents. When leveraged correctly, technology can be one of the most effective levers in achieving a sustainable savings model for the State.
It was noted by Governor Fallin in her February 2011 State of the State Address that information technology (IT) and infrastructure consolidation was the most effective way to reduce costs and could keep overall agency cuts in the 3 to 5 percent range. Implied in this statement is the reality that failure to consolidate will result in larger future cuts in agency budgets to fund duplicative IT expenditures and processes by the agencies.
The Governor and State legislators know the current IT model is not sustainable to meet the current or future needs of the State for technology resources. Consolidation and centralization of IT resources must occur. The State has already taken the first step in this direction with the announcement of the hard freeze on the hiring of all full-time IT resources, as noted in the Governor’s address in February of 2011. A second key step was the adoption of an IT modernization program estimated to cost $100 million. State IT and Telecommunications Modernization—Phase 1—Assessment | 1-2
The State of Oklahoma | Capgemini Government Solutions
As the Governor stated, “Oklahoma only needs one financial application—not 76.” Lasting productivity improvements require a shift in the way technology is acquired, managed, and deployed in the State. If we look at the States of Texas and Virginia as two examples, they shifted cost elsewhere without addressing the core issues and challenges negatively impacting productivity and costs. For all practical purposes, they are now engaged in rebuilding their respective IT infrastructures again. The State has valuable lessons learned from these models.
Since states can’t print money and many are debt averse, IT consolidation is the only sure way to reduce IT costs. The State is at a legislative precipice, but needs to execute IT consolidation initiatives to ensure immediate and long-term IT savings.
The two most frequently undertaken types of IT consolidation are physical consolidation and application consolidation. A review of states by the National Governors Association Policy Center found that at least 42 states have undertaken consolidation initiatives in recent years; 32 have implemented physical consolidation and 26 undertook application consolidation. Oklahoma is in good company in its endeavors.
The nature of the State’s business revolves around basic activities that lend themselves to the concept of shared services, or more simply put, the re-use of applications in the support of an agency’s mission by one or more agencies. The most fundamental ones are:
•
Eligibility. For federal, state, and local programs from Medicaid to child support.
•
Revenue. Income tax, sales tax, business taxes, fees, and other revenues collected in the State.
•
Appropriation and expenditure accountability. Appropriation and expenditure accountability is the same across the State for every agency.
•
Cost accounting. This includes programmatic initiatives in the State (1) with one or more funding sources involved and (2) requiring accountability beyond the appropriation level.
•
Imaging. Documents are a byproduct of government and need to be stored and retrievable.
The adoption of a shared services model is how the State eliminates duplicative systems. This lesson has been learned from other states with successful shared services initiatives including the State of Ohio, the State of Connecticut, and the State of Colorado.
The passage in 2009 of House Bill 1170—the Oklahoma Information Services Act (“the Act”)—created the position of CIO, appointed by the Governor, to also serve as Secretary of IT and Telecommunications with jurisdictional responsibility related to the IT and telecommunications systems of all State agencies. State IT and Telecommunications Modernization—Phase 1—Assessment | 1-3
The State of Oklahoma | Capgemini Government Solutions
House Bill 1170 required that a comprehensive assessment and analysis of the State-wide use of IT and telecommunications systems be conducted. The purpose for this study and assessment is to develop practical short- and long-term plans incorporating specific recommendations for modernization of State systems, infrastructure, and services to produce a minimum 15 percent first year savings in IT costs based upon FY2009 actual expenditures. The roadmap defined by this project leads to tangible cost savings and additional value-added services for the citizens of the State. It also details recommendations for enhancing State-wide IT capabilities across the entire spectrum of technology applications and infrastructure.
Some examples of our key finding across agencies:
•
76 financial systems (everything from custom Enterprise Resource Planning systems to Solomon to Oracle E-Business to Quick Books).
•
22 unique time and attendance systems.
•
17 different imaging systems.
•
48 reporting and analytics applications (e.g., Cognos, BI, Crystal Reports, Adobe, SAS, etc.).
•
3 different pension systems.
•
30 data center locations.
•
32,643 workstations (20 percent over four years of age).
•
7 mainframes.
•
129 e-mail and BlackBerry servers (with 25 agencies running their own e-mail).
•
Aging systems/processes, service gaps, duplicate services and resource constraints.
Note: As far as we have been able to ascertain, the State of Oklahoma is the only state that has not consolidated its wide-area network to a single network and maintains multiple networks by State agencies.
Higher Education represents a unique challenge in consolidation and standardization as a result of its distinctive mission. It is recommended that a State CIO for Higher Education be created. This may require a bill similar to HB 1170 that created the State CIO position. Similar findings were observed in Higher Education and are noted in the assessment findings. Centralization would yield benefits for the State. State IT and Telecommunications Modernization—Phase 1—Assessment | 2-1
The State of Oklahoma | Capgemini Government Solutions
2 Executive Summary
Cost savings are achievable, service performance can be improved, and organizational structures can be streamlined to deliver more with less. The research information validates that the State can achieve savings of at least 15 percent and potentially more.
Capgemini Government Solutions LLC was engaged by the State to conduct a feasibility study to assess the State’s IT environment and deliver a set of recommendations focused on opportunities to streamline the delivery of IT services and reduce IT operating expenses.
The team gathered information about State resources, computing and work environments, existing policies, technology investments and costs, data usage, applications, and the politics of each agency performing their own technology services. This has been an extensive assessment with careful consideration to the nuances of each individual State agency. Because a centralized formal mandate was not dictated to require agency participation, the team was not able to gather some of the detailed information required to precisely define each and every cost. The team has, however, validated that cost savings are achievable, service performance can be improved, and that organizational structures can be streamlined to deliver more with less. The next project phase, Strategy Prioritization Validation and Priority Strategy Implementation, will finalize this data and launch the short-term strategies to demonstrate progress and short-term savings. The overall approach that Capgemini has taken is:
•
Phase 1—State of Oklahoma Assessment.
•
Phase 2 —Strategy Prioritization Validation and Priority Strategy
Implementation.
•
Phase 3—Implementation Continuation.
•
Phase 4 —Optimization.
•
Phase 5—CIO Measurement and Reporting.
Based on the information provided by the various stakeholders, the assessment by Capgemini was successful in that it accomplished three key things:
1.
The research information validates that the State can achieve savings of at least 15 percent and potentially more.
2.
The team documented the as-is (current) state environment at a high-level, including assets, challenges, and resources, along with the to-be (future) state and the overall roadmap to get there.
3.
The effort also identified the top priority strategies needed to be agreed-to by the CIO, which will form the basis for phase 2.
Capgemini recommends that all technology projects and related expenditures be frozen for the coming year, with the exception of projects that, if not done, would State IT and Telecommunications Modernization—Phase 1—Assessment | 2-2
The State of Oklahoma | Capgemini Government Solutions
disable or severely impair an agency’s ability to deliver services and meet its mission. It is anticipated that very few projects would fall into this category. The recommended “hard freeze” will ensure that only these vital projects will get funded. Federally funded projects would be subject to review and determination of authorization on a case-by-case basis.
The emphasis and the focus of the two major technology IT initiatives recommended by Capgemini in the next year are to have the State execute a comprehensive normalization of the IT infrastructure and the accelerated roll-out of the CORE services to the agencies as an all-encompassing shared service for finance and administration. These should be the only two IT initiatives the State undertakes in the next fiscal year. The primary focus of the State for the next three to five fiscal years should be full implementation of these two initiatives with multiple supporting projects identified by Capgemini. If the State wishes to realize additional first-year savings, this can be accomplished by bonding the necessary investment. The financial estimates currently assume no bonding, to be consistent with the State’s preference to not borrow money which could be appropriated, thereby not committing future leadership to decisions made by current decision makers.
Phase 2, which we recommend starts as quickly as possible before the end of FY2011, will be the mobilization of teams to gather the detailed information for building the specific work plans, measurements, and status reporting constructs needed to achieve the savings identified by this assessment. Five teams are initially proposed and the teams will focus on the following:
•
Team A—Addresses the organization, structure, human resources, IT governance, contracts, and the measurement of savings.
•
Team B—Addresses State applications and how to eliminate the duplication, select the right ones, and place applications into portfolio management.
•
Team C—Addresses the closing of the data centers, segregated by types and sizes of centers (satellite sites, server farms, small sites, medium sites, and the large data centers).
•
Team D—Addresses the infrastructure, network, desktops, and future technologies including cloud and virtualization and the necessary IT service delivery process and tool improvements to sustain the new operational state.
•
Team E—Provides portfolio management and manage acquisition of services required to support the State’s transformation. Responsibilities include issuance of Requests for Proposals and analysis of overall program.
Capgemini has identified initiatives that will exceed $100 million in net savings over three years. Figure 2-1 provides a summary by four main IT areas, over a three-year period. The State of Oklahoma | Capgemini Government Solutions
Figure 2-1. Net Savings by Area Initiative and Operating Recommendations
Net Savings by Area Initiative and Operating Recommendations ($000) (see Year 1 assumptions)
Year 1
Year 2
Year 3
IT Operations/Infrastructure
-$14,837
$28,998
$57,445
Applications
-$6,495
-$15,554
$48,760
Governance
-$1,664
-$1,015
-$1,015
Executive and Administrative
$1,911
$5,538
$9,126
Sub-total
-$21,085
$17,967
$114,316
$111,198
Operations and Maintenance Reduction (One Time)
$23,347
Project Funding Differential (One Time)
$21,000
Total
$23,262
$17,967
$114,316
$155,545
Investment Required for Savings ($000)
Year 1
Year 2
Year 3
IT Operations/Infrastructure
$29,647
$36,417
$29,379
Applications
$6,495
$20,571
Governance
$1,664
$1,015
$1,015
Executive and Administrative
$39
Total
$37,845
$58,003
$30,394
$126,242
Assumptions Year 1
•
The 2011 operating budget for all agency IT spending is approximately $233,183,138. This number was derived from the examination of the general ledger accounts out of PeopleSoft for FY2010 and was estimated for FY2011 based upon the GL account spend as of month end, December 2010. Of the total, federal funds account for $61,718,196. Additionally, $15,815,821 is attributed to fees charged for services between agencies. That nets to $155,649,121, which is the estimated total tax dollars spent on IT in FY2010 and estimated for FY2011, for all executive branch agencies. 15 percent of this comes to $23,347,371.
•
The FY2011 operations and maintenance operating budget ($233 million) is transferred to the State CIO function.
•
Agency IT operations and maintenance full-time equivalents move under the direct control of the CIO.
•
To mitigate a decline in agency service levels during the transition process, we recommend a temporary SWAT team be created to deal with agency issues and allow the CIO’s core team to focus on the transition and integration of personnel, processes, and consolidation initiatives. The team would be comprised of State personnel and possibly external consultants.
•
15 percent of FY2011 operations and maintenance is applied as a reduction to the agency operating budgets for a total of $23 million (this does not include fees for services and federal funds).
State IT and Telecommunications Modernization—Phase 1—Assessment | 2-3
The State of Oklahoma | Capgemini Government Solutions
•
Project budgets are frozen less federal for a net savings of $21 million after $100 million bond is issued against the $121 million.
Investment is required to make the cost containment and savings materialize in the three-year timeframe. Failure to invest will negate the benefits outlined in this document. The State may believe that it has been investing on regular basis, and it has at the agency level, but investment decisions were based on a somewhat limited view driven by each agency’s specific mission. A view that does not consider the State as a whole is inherently a costly and unsustainable model. The investments are not trivial in nature, but it is the classic conundrum, “pay me now, or pay me later”. Later is almost always more expensive for both implementation cost and the lost savings opportunities that can never be recaptured.
In addition to the recommendations detailed within this document, it will be important to review existing laws, policies and current business processes. It may be necessary to modify certain legislative statutes and executive directives to ensure successful transformation of current IT practices. There are several directives that the State should consider acting on immediately to reduce IT costs in the short-term:
•
The Information Services Division (ISD) should be separated from the Office of State Finance effective with the start of the fiscal year. Making the decision now enables ample time for the ISD organizational design and budgeting process to be started and built using an appropriate cost accounting methodology to support financial tracking.
•
Issue a technology bond in the amount of $100 million for the acquisition of the services and equipment necessary to facilitate consolidation of IT infrastructure and services.
•
Centralize the State-wide agency IT budgets effective July 1st, 2011. Centralizing the funding for agency IT related initiatives and services defines a single point of accountability for the approval of IT funds, as well as the proper financial tracking and management. It is recommended this consolidation of funds should be in the amount of $233 million, which is 2011 operating budget by all executive branch agencies. Of this amount, $23 million for year one IT operations and maintenance savings should be set aside as the bond payment for the $100 million technology bond modernization funding recommendation.
•
Develop legislative mandates as needed to provide the State CIO with the ability to initiate, execute, and enforce accountability for all agencies IT resources State-wide. This could be a refinement of House Bill 1170, with one or more amendments.
•
Implement a freeze on all agency-level IT spending for technologies and services that are allocated to individual agency budgets, but not yet spent. As of December 2010, this amount, when adjusted for federal funding, represented $252 million in allocated and unspent dollars.
State IT and Telecommunications Modernization—Phase 1—Assessment | 2-4
The State of Oklahoma | Capgemini Government Solutions
•
Freeze all planned projects or recently initiated projects that are still in the projects early stages. As of the end of December, 2011, there was approximately $165 million in unspent/unapproved funds for planned projects for the Executive Branch. These funds should be applied by the agencies to meet next year’s budget requirements. For projects that are active and still in the planning /design stages, conduct a project review to re-visit the economic models for these projects. A review to ensure compliance to enterprise architecture and technology standards may result in cost avoidance downstream.
•
Consolidate all fiber assets into one agency immediately. This effort should include the consolidation of OneNet into ISD.
•
Higher Education represents a unique challenge in consolidation and standardization as a result of its distinctive mission. It is recommended that a State CIO for Higher Education be created on or before July 1st, 2011; possibly as an amendment to House Bill 1170 with the same authority over higher education as recommended for the State CIO.
•
The Higher Education CIO should have dotted line to the State CIO; the State CIO would maintain veto authority over IT activities, when it appears there is conflict with the State’s consolidation strategies, infrastructure, technical standards, or policies. Budgeting and planning activities would require the State CIO’s approval. There would be an assumption that the State CIO and Higher Education CIO would be in tight coordination on all projects which crosses beyond the higher education mission. It is recommended that this arrangement be kept in place for not more than five years. On or before the end of Year 5, the Higher Education CIO and staff eventually become part of the rest of State IT under the auspices of the State CIO, with the Higher Education CIO becoming a Deputy IT Director.
•
Key benefits to the State on this arrangement is joint purchasing on IT and telecommunications hardware and software, and joint systems development and deployment for items of a utility nature, including e-mail, desktop standards, and fiber networks for connectivity.
•
Consolidate all agency IT personnel and personnel budgets under the direct authority of State CIO. Transition ideally would start prior to July 1st, 2011 and become effective on July 1st, 2011. Higher education is excluded from this recommendation pending action on the above recommendation regarding the appointment of a Higher Education CIO.
•
The State CIO should be given full control and approval for IT acquisitions. This is beyond the current responsibility to only be able review and sign-off on requirements provided by the agency, but to have final approval of all IT acquisitions for all agencies.
State IT and Telecommunications Modernization—Phase 1—Assessment | 2-5
The State of Oklahoma | Capgemini Government Solutions
•
The governance model requires the House Bill1170 Technology Application Board to be replaced with the State IT Advisory Board. This board would advise the State CIO on external events and business insight into State IT practices based on their commercial knowledge. The intention is to utilize external corporate and IT knowledge thought leaders to provide other points of view on State IT opportunities.
•
During the process of initiating recommended changes, it is expected other policy, executive directives, and statutes may be discovered and require changing as the State pursues shared services and consolidation initiatives as this is a dynamic iterative process.
Figure 2-2 provides a list of the specific initiatives with a breakdown of the investment costs, ongoing/operating costs, savings and net benefits by year for the first three years. Several of these opportunities will continue to provide ongoing annual savings and some will require ongoing operational costs. We expect that long-term annual benefits will continue to outweigh annual costs for several years to come.
State IT and Telecommunications Modernization—Phase 1—Assessment | 2-6
The State of Oklahoma | Capgemini Government Solutions
State IT and Telecommunications Modernization—Phase 1—Assessment | 2-7
Figure 2-2. Estimated Investment and Cost Savings
Area
Initiative
Year 1 ($000)
Year 2 ($000)
Year 3 ($000)
Total ($000)
Transform Costs
Operating/ Ongoing Costs
Cost Avoidance
Hard Savings
Net Savings
Transform Costs
Operating/ Ongoing Costs
Cost Avoidance
Hard Savings
Net Savings
Transform Costs
Operating/ Ongoing Costs
Cost Avoidance
Hard Savings
Net Savings
Transform Costs
Operating/ Ongoing Costs
Cost Avoidance
Hard Savings
Net Savings
Operations
Management Asset
$1,225
$780
$178
-$1827
$2,439
$5,203
$2,764
$2,751
$13,963
$11,212
$1,225
$5,970
$19,344
$12,149
Operations
Service Desk and Incident Management
$627
$706
$1,105
-$228
$2876
$4,345
$1469
$2,876
$4,345
$1,469
$627
$6,458
$9,795
$2,710
Operations
Problem Management Improvements
$462
$106
-$356
$324
$158
-$166
$324
$158
-$166
$462
$648
$422
-$688
Operations
Change Management
$248
$528
$637
-$139
$633
$2,187
$1,554
$633
$2,187
$1,554
$248
$1,794
$5,011
$2,968
Operations
Automated Event Monitoring and Control
$1,588
$252
$603
-$1,237
$724
$1,494
$770
$724
$1,494
$770
$1,588
$1,700
$3,591
$303
Operations
Availability Management
$490
$688
$198
$193
$1,375
$1,182
$193
$1,375
$1,182
$490
$386
$3,438
$2,562
Operations
Capacity Management
$1,108
$129
-$979
$372
$246
-$126
$1,108
$372
$375
-$1,105
Operations
Service Request Catalog
$1,276
$107
$2,590
$1,421
$702
$320
$2,590
$2,208
$702
$320
$2,590
$2,208
$1,276
$1,404
$747
$7,770
$5,837
Operations
IT Service Level
$346
$144
$509
$19
$237
$509
$272
$237
$509
$272
$346
$618
$1,527
$561
Operations
IT Chargeback
684
$168
-$852
$684
$168
-$852
Operations
ITIL Training
$104
-$104
$52
-$52
$52
-$52
$104
$104
-$208
Operations
CSI Marketing and Communications
$243
$251
-$494
$362
-$362
$362
-$362
$243
$975
-$1,218
Applications
HCM Implementation
2678
-2678
$8,033
-$8,033
$10,711
$10,711
$10,711
$10,711
Applications
Pension
Applications
Budgeting
$1,310
-$1,310
$655
$655
$655
$655
$1,310
$1,310
Applications
Reporting and Analytics
Applications
Fixed Assets
$1,895
-$1,895
$10,738
-$10,738
$12,633
$12,633
$12,633
$12,633
Applications
Financials (Accounting 1/2 and T&E)
$612
-$612
$306
$306
$306
$306
$612
$612
Applications
GIS and Mapping
Applications
GRC
$1,800
-$1,800
$1,800
$1,800
$1,800
$1,800
Applications
CORE Contractor
$18,600
$18,600
Applications
EAFW
$4,056
$4,056
$4,056
$4,056
$8,112
$8,112
Telecomm
VoIP
$3,979
$2,136
-$1,842
$5,036
$4,840
-$195
$2,229
$6,972
$4,743
$11,244
$13,948
$2,705 State IT and Telecommunications Modernization—Phase 1—Assessment | 2-8
The State of Oklahoma | Capgemini Government Solutions
Area
Initiative
Year 1 ($000)
Year 2 ($000)
Year 3 ($000)
Total ($000)
Transform Costs
Operating/ Ongoing Costs
Cost Avoidance
Hard Savings
Net Savings
Transform Costs
Operating/ Ongoing Costs
Cost Avoidance
Hard Savings
Net Savings
Transform Costs
Operating/ Ongoing Costs
Cost Avoidance
Hard Savings
Net Savings
Transform Costs
Operating/ Ongoing Costs
Cost Avoidance
Hard Savings
Net Savings
Telecomm
MPLS
$4,500
$2,293
-$2,207
$3,000
$7,860
$4,860
$3,000
$11,609
$8,609
$10,500
$21,762
$11,262
Infrastructure
Data Center Consolidation
$5,118
$1,131
-$3,987
$1,144
$3,042
$1,898
$3,042
$3,042
$6,262
$7,215
$953
Infrastructure
Mainframe Consolidation
$300
-$300
$628
$1,013
$385
$250
$2,759
$2,509
$1,178
$3,771
$2,593
Infrastructure
E-Mail Consolidation/C ollaboration
$838
-$838
$3,847
$6,568
$2,720
$3,847
$6,568
$2,720
$8,532
$13,135
$4,603
Infrastructure Consolidation
Computer Optimization -Server
$1,120
$322
-$799
$2,062
$1,331
-$731
$1,480
$2,549
$1,069
$4,662
$4,201
-$461
Infrastructure
Workstation Optimization
$3,058
$2,406
-$652
$11,050
$21,574
$10,524
$8,497
$17,165
$8,668
$22,605
$41,144
$18,540
Infrastructure
Enterprise Storage
$1,465
-$1,465
$879
$879
$879
$879
$1,465
$1,757
$292
Infrastructure
Staffing
$8,097
$8,097
$8,097
$8,097
Governance
Implement IT Governance Program
$456
-$456
$38
-$38
$38
-$38
$456
$75
-$531
Governance
Operationalize IT Governance
$207
$564
-$771
$564
-$564
$564
-$564
$207
$1,693
-$1,900
Governance
Organizational Change
$114
-$114
$114
-$114
Governance
IT Governance Communications
$42
$78
-$120
$78
-$78
$78
-$78
$42
$234
-$276
Governance
Enterprise IT Architecture for Governance
$132
$71
-$203
$335
-$335
$335
-$335
$132
$742
-$874
Total
$34,433
$3,374
$107
$14,704
-$22,996
$48,446
$9,557
$5,337
$65,097
$12,431
$19,987
$10,409
$38,578
$78,410
$86,591
$102,866
$23,341
$62,622
$158,206
$94,620 The State of Oklahoma | Capgemini Government Solutions
Figure 2-3 provides a high-level overview of the implementation strategy and timing of the opportunities, ultimately leading to the future state for the State. The opportunities are organized by areas along the outer borders, opposite the final future State in the upper right. The opportunities are also identified by the year in which the opportunity should be initiated. Dotted lines indicate a dependency between opportunities.
Figure 2-3. High-Level Implementation Roadmap
Figure 2-4 provides a summary of the impacts as the State migrates from the current state of IT to the future state.
Figure 2-4. Summary of Impacts
Current State
Initiatives
Future State
30+ data centers and over 75 remote computing sites
Data center consolidation
Three data centers
4,000+ applications
Adoption of a shared services or common, enterprise-wide development application framework (platforms)
400 to 700 applications
129 e-mail/BlackBerry systems
E-mail consolidation/ collaboration
One e-mail system
No disaster recovery State-wide
Basic disaster recovery
State-wide disaster recovery
No IT governance
Basic governance model
State-wide IT governance model
Decentralized budgets
Use the People Soft Enterprise Performance Management module on zero based budgeting model for all IT budgeting
Centralized budget with cost accounting detail and performance measures
1,279 employees
Combined impact
909 employees
State IT and Telecommunications Modernization—Phase 1—Assessment | 2-9
State IT and Telecommunications Modernization—Phase 1—Assessment | 3-1
The State of Oklahoma | Capgemini Government Solutions
3 Approach and Current Situation
Capgemini performed a review and analysis of the State’s technology operations and costs, which led to the development of a comprehensive portfolio of improvement opportunities.
Capgemini’s analysis identified the number of State IT and telecommunications users and examined the majority of the State’s sites, systems, infrastructure, software, contracts, historical IT costs, methodologies, tools, network, security, and hardware. As part of this analysis, Capgemini uncovered aging systems/processes, service gaps, duplicated services and resource constraints.
3.1 Approach
A two-pronged, parallel approach was used to capture the necessary data elements required as part of the assessment. One approach was a manual survey process containing a series of questions designed around people, processes, and technology that captured the current state of IT used within each agency. These surveys were submitted to 108 agencies within the Executive Branch, as well as the State’s higher education institutions. The second approach included a combination of the manual survey and an automated data collection process. The State defined 18 large- and medium-sized agencies as candidates for automated data collection of the assets currently in use in support of each agency’s mission. These agencies are considered the Tier 1 agencies. The State agreed to utilize an agent-less, non-intrusive tool (BDNA Discover) to accurately collect information relating to an agency’s technology. Seventeen of these large- to medium-sized agencies participated in the BDNA scan.
While we achieved a respectable level of manual survey responses (weighted by agency IT spend and agency employee population) the manual survey responses have gaps or included inconsistent data.
Figure 3-1. Manual Survey Response Tracking
Agency Tracking (Without Higher Education)
Total number of agencies
108
Total number complete
74
Total number incomplete
34
Percentage complete
69 percent
A review of the manual survey responses indicated several agencies did not fully complete all sections of the survey’s five sections distributed to each agency.
Capgemini performed a review of the quality and completeness of the survey responses by agency. As part of this review, each response has an equal weighting of 1. The responses to the five surveys sections were factored into an overall score with a maximum raw value of 111 per agency. Each agency’s score is represented as a percentage of the maximum values, 100 percent being the maximum score State IT and Telecommunications Modernization—Phase 1—Assessment | 3-2
The State of Oklahoma | Capgemini Government Solutions
and 90 percent representing a target. For the Tier 1 agencies, the average score for all agencies who responded was 80.60 percent. Figure 3-2 provides the scores for all Tier 1 agencies.
Figure 3-2. Survey Tracker—Qualitative Statistics—Tier 1
Tier 1
Roll-Up Score
Agency
Agency GL ID Number
Score
1
Office of Juvenile Affairs
400
99.1 percent
2
Department of Human Services
830
99.1 percent
3
Office of State Finance
90
97.3 percent
4
Department of Central Services
580
96.4 percent
5
Department of Corrections
131
94.6 percent
6
Regents for Higher Education
605
87.4 percent
7
Department of Veterans Affairs
650
86.5 percent
8
Department of Agriculture
40
85.6 percent
9
Oklahoma Tax Commission
695
84.7 percent
10
Oklahoma Public Employees Ret. System
515
82.9 percent
11
Department of Transportation
345
81.1 percent
12
Department of Environmental Quality
292
79.3 percent
13
Corporation Commission
185
62.2 percent
14
Employment Security Commission
290
61.3 percent
15
Department of Rehabilitation Services
805
61.3 percent
16
State Department of Health
340
60.4 percent
17
Department of Public Safety
585
51.4 percent
18
Mental Health and Substance Abuse Services
452
50.5 percent
In addition to the BDNA scans and surveys, additional information was provided to assist in the validation of the automated and manual survey results.
The Office of State Finance has provided the Capgemini team with various budgetary and planning reports as a means of correlating the data captured with high-level agency plans submitted on an annual basis. This included the IT and telecommunications plans for the FY2009 through FY2011 period. This information provided information on planned IT operating expenses and project costs for each of these fiscal years. These plans also provide limited information regarding the personnel costs associated with IT for FY2011. In addition, the Capgemini team was provided with actual IT expenditure information for FY2009 through FY2010.
The Capgemini team was also provided reports previously conducted for specific agencies or initiatives. This included the Oracle Insight report with a review of the PeopleSoft (CORE) application and post-production and operational support processes and capabilities.
The Office of State Finance also provided information on the services currently provided by its agency to other agencies throughout the State. The State of Oklahoma | Capgemini Government Solutions
3.2 Current IT Environment
The combination of the automated and manual data collection processes as well as the additional information has provided a snapshot in time of the current state of IT in use by the State.
A key finding is that large- and mid-sized agencies (approximately 60 in total) manage their IT functions as an independent department within the agency, with either a CIO or IT Director. This decentralized IT management gives the agency and its IT leadership full authority to make IT decisions that are in its best interest. While this approach to IT management may result in a more responsive delivery of IT services to an organization, it generally often comes at great expense as IT fails to optimize resources across the enterprise. This decentralized governance model often results in a proliferation of applications and infrastructure technologies. This leads to a number of inefficiencies, including:
•
The inability to leverage buying power across the enterprise.
•
The over-provision of IT infrastructure resources as each agency
incorporates its surge capacity into its design resulting in hardware
operating at a fraction of capacity.
•
Expensive integration requirements to share data across agencies.
•
Additional information assurance risks due to a lack of industrialized processes including, backup, fault tolerance, and disaster recovery.
•
Redundant human capital necessary to support the local infrastructure and applications.
In many cases, the IT leaders are making decisions around the level of IT infrastructure investments required to support the short-term and long-term needs of their agency. This has led to over provisioning of IT capacity, since it is more cost-effective to acquire additional capacity and grow into it at the start of a major initiative, rather than add capacity once demand increases. This typically leads to assets being underutilized, waiting for the growth to occur over time. Imagine this over provisioning taking place 60 times, since the majority of the agencies have independent IT organizations with the authority to make these decisions. Based on this, the following finding was not a surprise:
In the survey responses, the agencies indicated that they had 1,799 full-time equivalents engaged in IT activities, but per the full-time equivalency plan of 2011, the agencies should be at 1,279 full-time equivalents. The significance is that there may be even more full-time unaccounted equivalents involved in IT. We do believe the number of IT personnel within the agencies may be closer to 1,279 since some agencies have notified the team that they entered the information incorrectly
State IT and Telecommunications Modernization—Phase 1—Assessment | 3-3
The State of Oklahoma | Capgemini Government Solutions
Given the current model, agency IT directors are tasked with providing the best service and optimizing IT expenditures and processes for their individual agency. By optimizing at the agency level, the State as a whole is not optimized from an IT perspective.
Capgemini found a number of disparate architectures, numerous technology vendors, and literally thousands of software products throughout the State. The loss of support synergies, purchasing economies of scale, and cross agency integration difficulties are driving the cost of IT higher at the aggregated State level.
The State of Connecticut embarked on a shared services initiative for its finance and administrative applications beginning in 2005. While the State of Connecticut has fewer agencies, the model is a good example of a successfully executed transformation to shared services and cost savings, and is representative of the recommendations that have been made in this assessment to the State. Other similar models are States of Colorado and Ohio. In each case, these states are further along the shared services path than Oklahoma by three to four years.
We would not recommend the voluntary model the State of Ohio has adopted for shared services; it is problematic at both the governance level and for realizing cost savings. From a State-wide perspective, this type of governance model would be equivalent to the voluntary adoption basis of the State’s CORE services—in other words, no effective governance. Once the door is opened for participation exceptions to shared services and consolidations, the cost savings of consolidation have been effectively negated. With over 40 years of a highly decentralization mindset in the State regarding IT, it is going to require a severe course correction to enable the successful adoption of a shared services model. There is no easy solution to this problem. In these types of environments, a quick transfer of the budgets, personnel, and authority is the most painless way to accomplish a successful move to shared services and consolidations.
3.2.1 Current State Analysis—Operations
The current situation relative to State operations can be characterized by the following elements based on the survey data received:
•
Limited operational shared services in use throughout the State.
•
Low process maturity in key service operation, transition, and design processes leading to execution inefficiencies. The Office of State Finance and the Department of Human Services did report the highest process maturity rankings in the core IT service processes.
•
A variety of IT service management tools are currently in use by various agencies.
•
Limited end user self-service portals are available, limiting the State’s ability to speed end user service and reduce service desk calls.
State IT and Telecommunications Modernization—Phase 1—Assessment | 3-4
The State of Oklahoma | Capgemini Government Solutions
•
Inconsistent IT asset management process maturity is leading to excessive costs.
•
Customer relationship management (CRM) software has been retrofitted to provide service desk functions while a leading practice software toolset is available for State usage from an enterprise contract with DHS.
•
System and application monitoring is very immature and leads to a lack of performance data and delayed service disruption resolution.
•
To support service desk operations across the State, 16 different software packages and processes are used.
3.2.2 Current State Analysis—Applications
CORE is the primary financial system and is considered the system of record for the State. CORE is maintained and operated by the Office of State Finance. There have been several studies since 2008 by the Hackett group and Pew Center on state organizations, and most recently, the completed Oracle Insight (CORE) PeopleSoft evaluation of December 2010 on the applications in use in the State.
The State’s implementation of PeopleSoft is a shared services model for financial, human capital, and administrative processes. Its deployment and utilization are ineffective because of the lack of authority to require adoption by the State agencies. This effectively negates the benefits and adoption of optimal process capabilities which resulted in the following observations from Oracle during their independent analysis on current process adoption and maturity:
•
The Oracle Insight evaluation paints a rather grim picture of suboptimal application usage/deployment for the CORE PeopleSoft financials and human capital management, which is consistent with the application survey findings. The use of business intelligence and analytics were themes they stressed in particular, with a great urgency to be deployed by CORE.
•
The Oracle Insight team also noted the State was lagging on the upgrade path for both financial and human capital management.
•
Interestingly, the Oracle Insight Team did not address governance, risk, and control (GRC), a fairly recent emerging requirement that should be included in any future upgrades and enhancement work with PeopleSoft. It is noted in the future projects that there is a GRC project planned by the State.
•
The Hackett group, Pew Center on States, and Oracle Insight reports has evaluated CORE and each of the reports shares one or more of these themes: under utilization; lack of return on investment; lack of best practices in finance and administration; redundancy; accessibility issues; and the need to extend shared services to more agencies.
State IT and Telecommunications Modernization—Phase 1—Assessment | 3-5
The State of Oklahoma | Capgemini Government Solutions
•
The more application silos, the more human capital required to maintain them. This was apparent from the staffing ratios and the large amount of consulting support required by the agencies to maintain their respective application portfolios. For example, the State agencies’ spending on consulting related to applications is estimated at $13 million for FY2009, $26.3 million for FY2010 and projected at $31 million for FY2011. This represents year over year increases of 50 percent and 18 percent. The State of Connecticut Department of Information Technology experienced a 33 percent drop in consulting spending by $11 million dollars within four years with their implementation of shared services and consolidation initiatives (see http://www.ct.gov/doit/lib/doit/4d-11_fy_2010_final.pdf).
•
In line with the Governor���s State of State Message in February 2011, the recommendation for electronic payments and P-Cards represents examples of shared services and processes that are needed in the financial and accounting areas; a savings of $3.6 million on the electronic payments was noted vs. a paper check.
•
Consistent with the National Association of State Chief Information Officers (NASCIO) Top 10 Priority Strategies in FY2010, the State is already actively engaged in five at different stages of maturity to address these current baseline deficiencies:
-
Budget and cost control, including managing budget reduction, strategies for savings, reducing or avoiding costs, activity based costing.
-
Consolidation and centralizing, including consolidating services, operations, resources, infrastructure, and data centers.
-
Shared services, including business models, sharing resources, services, and infrastructure, independent of organizational structure.
-
Transparency, including open government, performance measures and data, accountability, access to government data.
-
Governance, including improving IT governance and data governance.
•
The Oracle Insight CORE recommendations are consistent with the Capgemini view and the NASCIO priority recommendations and support the State’s direction to shared services and consolidation. We would encourage their adoption as part of the improvement process to the baseline applications used by CORE. As noted in the Oracle Insight document of December 2010, nine initiatives are listed in Figure 3-3.
State IT and Telecommunications Modernization—Phase 1—Assessment | 3-6
The State of Oklahoma | Capgemini Government Solutions
Figure 3-3. Oracle Insight Initiatives
•
While the current state of the State’s application portfolio with its many silos is not optimal, it should be noted that the waters were tested towards governance and standardization. It was difficult to get consensus. In effect, the agencies and the Office of State Finance did what they needed to do to meet finance and administration requirements in the State’s decentralized IT model. The lack of State-wide governance and a State CIO function further exacerbated this problem. Examples of this non-standardization include (but is not limited to these items):
-
55 agencies were identified by the Office of State Finance through the business process analysis (BPA) exercise in December 2010 that would benefit from PeopleSoft projects/grants GPC module, 11 agencies accepted the invitation to participate in CORE.
-
40 agencies were indentified during the BPA that would benefit from the PeopleSoft strategic sourcing capabilities.
-
86 agencies may benefit from the PeopleSoft accounts receivable (AR) and/or business intelligence modules, particularly licensing agencies. Observation on AR: These numbers illustrate that if the agencies are not participating in CORE, they must have something they are using to manage these AR activities, or worse, they are all manual processes. If half of the 86 agencies do not participate in the Accounts Receivables module and maintain some kind of system, then there is an interface requirement being maintained for 43 agencies. If the other half is using manual processes, the State has staff engaged in the paper chase, with the lowest productivity and highest cost per AR transaction. State IT and Telecommunications Modernization—Phase 1—Assessment | 3-7
The State of Oklahoma | Capgemini Government Solutions
-
18 agencies would benefit from the use of the fixed asset (inventory) module and are noted in the CAFR (comprehensive audited financial report) with inventory valuation. It was noted in the assessment that multiple fixed assets systems exist in the State.
•
Oracle’s Insight recommendations of November 2010 to the State found similar or the same findings.
3.2.3 Current State Analysis—Telecommunications and Network
The current state of networks and telecommunications infrastructure in the State can be characterized by the following elements, based on the automated scans and survey data received:
•
A mixed set of vendors and vendor models of equipment is in use for common functions like switching and routing. The survey results and the BDNA scans indicate switching and routing from Cisco, Juniper, Extreme, 3COM, Dell and Netgear. The same was observed for wireless equipment vendors. This results in excessive support personnel requirements and limited purchasing strategies for the State.
•
The lifecycle of equipment deployed is in various stages of support are at end of life. BDNA scans show multiple versions of OS/Firmware on network equipment, a potential security concern. We also observed platforms from Cisco and 3COM that are no longer supported by vendors. A multitude of vendors also make the task of lifecycle management difficult.
•
We observed an inconsistency of tools for network performance and monitoring. No State-wide set of metrics exists to measure and compare network performance. The tool sets used for monitoring were also fragmented and ranged from basic tools like Solarwinds to Nagios.
•
There is no State-wide network compliance model for network and telecom. This makes auditing for security compliance and monitoring very difficult.
•
There are competing wide-area network (WAN) architectures in place throughout State agencies. The Office of State Finance, Department of Human Services, Department of Corrections, OneNet, and others maintain WANs that provide the same services to themselves and/or other State entities.
•
The State owns a significant fiber plant throughout the capital complex and other major population centers in the State. However, pockets of responsibility and ownership exist (the Department of Transportation, OneNet, third party administrator, and the Office of State Finance) throughout the State for the laid fiber, with no single owner and/or authority in place today for State-owned fiber. This enables additional purchases of capacity and creates an inefficient use of State-owned capacity.
State IT and Telecommunications Modernization—Phase 1—Assessment | 3-8
The State of Oklahoma | Capgemini Government Solutions
•
We also noticed that several agencies manage their own WAN and deploy point-to-point (P2P) circuits to remote locations from central offices. Many locations with multi-agency presence have duplicate circuits and local area network (LAN) environments, which results in unnecessary costs that can be eliminated by consolidating and sharing such assets. Several State agencies including the Department of Human Services, Department of Corrections, and Office of State Finance maintain their own private branch exchanges and voice circuits. Telephony is a good example of a shared service used by a limited number of agencies today that should be expanded State-wide.
•
The Office of State Finance currently has a central shared service that is being used by several agencies resulting in consolidation or elimination of several LAN segments. The use of these shared services is mostly by small and medium size agencies. In some cases, agencies that are opting for the shared services still maintain their own infrastructure. The shared services model is not being leveraged by large agencies.
•
As far as we have been able to ascertain, the State of Oklahoma is the only State that has not consolidated it’s WAN to a single network and maintains multiple networks between State agencies. Most States led consolidation initiatives in the 1980s and the 1990s. The initial cost for the networks, along with ongoing maintenance, represents a lost opportunity for a consolidated network and the associated savings. It is estimated at a minimum of $3 to $6 million to as much as $15 million is spent annually by different agencies to maintain their own networks.
•
The current State network initiative is more about replacing obsolete networks and standardizing on a single network with current technology. Typically, agencies like the Department of Corrections and the Department of Public Safety will object to consolidation on the basis of security. Great advances have been made in the segmentation of networks for security and other purposes, and such security concerns are far less relevant.
Several recent initiatives spearheaded by the Office of State Finance, such as Voice over Internet Protocol (Voice over IP, VoIP) migration is a step in the right direction for consolidating the State’s network and telecommunications infrastructure to address some of the references made above.
3.2.4 Current State Analysis—Infrastructure
The State’s current infrastructure is a reflection of several years spent building and operating IT environments and making IT decisions at the agency level. Consequently, we observed varying levels of sophistication and maturity across the enterprise.
Based on information collected through surveys and discovered with BDNA, we observed the following themes in the current environment:
State IT and Telecommunications Modernization—Phase 1—Assessment | 3-9
The State of Oklahoma | Capgemini Government Solutions
1.
Disparate technologies exist within and across agencies as evident by the following facts:
•
Multiple vendors and technology platforms are supporting core data processing activities. For example, 14 storage providers, 10 server manufacturers, and 15 printer manufacturers were identified. This results in excessive support cost and limited purchasing power.
•
While there are State-wide contracts with specific workstation vendors, many agencies still own and maintain workstations from other non-contract vendors, adding to the complexity and cost of end user management.
•
Most major agencies maintain their own anti-virus platforms, with varying degrees of proficiency. 8 different versions of McAfee were identified in the BDNA scans.
•
Multiple database technologies exist, including approximately 30 different versions of SQL and Oracle.
2.
We found no cohesive technology lifecycle management (TLM) process or strategy in use across the technology landscape, as evident by the following facts:
•
Lack of tools to consistently manage software upgrade cycles:
-
More than 25 workstation operating systems.
-
14 different versions of Microsoft Office.
-
More than 18,000 Windows XP Nodes, data capture also revealed instances of Windows 95.
-
34 NT devices.
-
1,340 Windows 2003 devices discovered.
•
Lack of lifecycle management tools:
-
706 workstations purchased in FY1999 or earlier.
-
More than 6,661 personal computers out of warranty coverage (23 percent of total workstations).
-
50 percent of databases are no longer under vendor’s support.
-
92 percent of current SQL Server databases no longer under support as of April 12th, 2011.
State IT and Telecommunications Modernization—Phase 1—Assessment | 3-10
The State of Oklahoma | Capgemini Government Solutions
3.
There was limited development of a central governance model or standard for the technology architecture. Responsibility for this currently lies within agency, as evident by the following facts:
•
No State-wide adoption of a uniform hardware platform as evident by statistics above.
•
Limited State-wide support contracts for infrastructure devices.
•
No unified technology portfolio management capability or structure exists across the State for software distribution, patch management, and standards enforcement.
4.
Although some agencies offer shared IT services, we observed limited shared services adoption from larger State agencies. This has led to wide-scale duplication of core services, as evident by the following facts:
•
Commodity IT, such as e-mail, antivirus, back-up, file and print, collaboration, domain and directory services, database management, and server management and administration functions are operated and maintained individually by agencies. There are 129 e-mail or BlackBerry servers in use across the State.
•
Use of service-level agreements and performance metrics is not institutionalized.
The survey results indicate a very large portion of State IT assets fall outside of the manufacturer’s warranty or maintenance support period. The lack of standardized technologies contributes to higher costs and requires additional staffing with specialized skill sets. Outdated technology devices are prone to a higher failure rate, longer recovery times, potential constraints on security, and increase the difficulty to deploy additional application functionality, resulting in higher operating costs and diminished end user productivity.
The survey results indicate there are 30 data centers, computer rooms, and computer closets running mission critical applications in the Executive Branch of the State. The survey data indicated many mission critical business applications require around the clock support (24 hours X 7 days per week X 365 days per year). Those applications that are perceived as mission critical should be part of a disaster recovery plan that focuses on the resumption of normal business operations in the event of a disaster or major business interruption. It was reported only the largest agencies (OSF and DHS) have an appropriate process maturity level for some core IT processes, disaster recovery planning and disaster recovery capabilities, while many of the smaller agencies indicated a level of disaster response process maturity that is unacceptable. This may result in longer system outages, more costly recovery processes, and potential loss of services to the constituents of the State.
State IT and Telecommunications Modernization—Phase 1—Assessment | 3-11
The State of Oklahoma | Capgemini Government Solutions
State IT and Telecommunications Modernization—Phase 1—Assessment | 3-12
Figure 3-4 describes the current-state findings, high-level recommendations, and the primary benefits behind each recommendation.
Figure 3-4. Summary Infrastructure Current State
Current State Findings
High-Level Recommendations
Primary Benefits
Disparate technology
•Standardize on technology models, products, versions. •Retire outdated systems. •Manage decisions and compliance moving forward.
• Streamlined portfolio. • Cost reduction. • Aligned support staff. • Increased management capabilities.
No centralized TLM strategy
•Develop and publish a TLM strategy, with acceptable guidelines, standards and an appropriate execution strategy.
•Improved cyclical spend decisions. •Reduced risk, support and testing needs. •Eliminated end of life or support agreements with expensive maintenance contracts.
Limited governance and standardization
•Standardize decision criteria, thresholds, reporting and metrics. •Define model and process for governance and standardization.
•Transparency—the State can’t manage what it can’t measure.
Limited shared services
• Continue Office of State Finance initiatives around shared services, shared infrastructure and State­wide
governance. •Standardize on common core services and provide them centrally across the State.
•Significant cost reductions by removing duplicated services and administration. •Gained centralized management capabilities. •Determined shared model support required for overall technical administration and management. The State of Oklahoma | Capgemini Government Solutions
3.3 Financial Observations
In addition to the IT-specific areas, findings related to IT spending from a financial standpoint should also be highlighted.
IT and telecommunications expenses for State agencies are recorded in two major categories:
•
Salaries and benefits.
•
Hardware, software, consulting and other.
State agencies, when recording salary and benefit costs, do not identify the employees specifically assigned to IT and telecommunications activities. Therefore, it is not possible to determine the IT and telecommunications expenditures for salary and benefits.
The actual costs presented in this financial baseline were obtained from the Office of State Finance. Our analysis of the various materials provided indicates the estimated IT staff headcount, salary and benefits costs by branch, as depicted in Figure 3-5.
Figure 3-5. 2009 Actual Expenditures and 2011 Headcounts and Costs
Branch
2009 Actual IT Expenditures (excluding personnel costs)
2011 Planned IT Headcount
2011 Planned IT Personnel Costs
Average Salary per IT Headcount
Executive
$220,538,502
1,279
$97,512,743
~$78,000
Judicial
$5,319,991
N/A
N/A
N/A
Legislative
$1,402,260
N/A
N/A
N/A
Higher Education
$139,161,404
1,036
$62,784,782
~$60,600
Total
$366,422,157
2,315
$160,297,525
~$70,125 (Blended)
*Please note that the Judicial and Legislative branches do not submit plans to the Office of State Finance for their annual IT and telecommunications plans.
As part of our financial assessment, we conducted an analysis comparing the FY2009 and FY2010 IT planned budgets for hardware, software and consultants and compared them to the actual expenditures for the corresponding period. The results of this analysis indicated the amounts budgeted to be in excess of the amounts spent by a sizable percentage. One can draw the conclusion that monies budgeted and allocated for IT modernization initiatives are not being spent, but may be directed elsewhere to fund the operation and administration of non-IT agency functions. It is also understood the plans may include funds for projects dependent on grants that are not received; and as a result, the planned projects are not initiated. Nevertheless, opportunities no doubt exist for improvements in the accuracy of IT budgeting estimates through consolidation.
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Figure 3-6 depicts the planned budget to actual expenditures comparisons for FY2009 and FY2010.
Figure 3-6. Budget to Actual Comparison FY2009 and FY2010
Branch
FY2009 IT Planned Expenditures (excluding payroll)
FY2009 IT Actual Expenditures (excluding payroll)
Difference
Executive
$404,513,005
$220,538,502
$183,974,503
Higher Education
$184,321,339
$139,161,404 $45,159,935
Total
$588,834,344
$359,699,906
$229,134,438
Branch
FY2010 IT Planned Expenditures (excluding payroll)
FY2010 IT Actual Expenditures (excluding payroll)
Difference
Executive
$394,323,708
$210,749,752
$183,573,956
Higher Education
$131,182,348
$134,762,649
-$3,580,301
Total
$525,506,056
$345,512,401
$179,993,655
IT Actual Expenditures vs. IT Telecommunications Plans
The State has spent less than planned for IT services by an average of $200 million each of these years.
Figure 3-7 highlights agencies that had largest percentage of the under spend on IT during FY2009. Appendix F— Supporting Financial Data includes a comparison for each agency for FY2009.
Figure 3-7. Comparison of Planned vs. Actual Expenditures FY2009
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3.4 Human Capital/Operations
As noted in the Section 3.3—Financial Observations, IT personnel costs are not recorded specifically by agency IT, but to the individual agencies as a whole. In addition, there is not an overall breakdown of the skills and competencies within the IT personnel group for the State as a whole. As part of the manual survey process, an attempt was made to understand the skills and competencies of the IT staff within the individual agencies. From the survey responses, it is clear there is not a source available to identify the IT skills and competencies available to the State of Oklahoma. This no doubt results in under utilization as well as over sourcing.
As the State progresses to its desired future state, it will be very important to build and understand the true skills and competencies of the IT staff of the State as a whole. It is recommended the development of a skills database structured around a survey on State-wide IT personnel be implemented and maintained.
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4 Portfolio of Improvements
The portfolio of improvements identified by Capgemini is designed to deliver long-term reductions in the total cost of ownership for IT services delivered State-wide. This transformation is rooted in the deployment of standardized processes to improve the quality of services provided to agencies while providing a feedback loop for continuous process improvement.
To achieve the quickest and greatest IT and telecommunications cost savings throughout the State, the CIO study has identified two strategic objectives: productivity and quality.
These two strategic objectives will help the State eliminate redundant, overlapping, and inefficient processes and yield an overall sustainable cost savings exceeding the target, depending on how aggressively the State wants to develop and implement these strategies. These initiatives will mitigate the current risk that we observed within the State by developing a high-availability IT and telecommunications infrastructure and service delivery model.
The collective impact of the initiatives identified by the CIO study is linked to these strategic objectives and is in direct support of HB1170. Once these initiatives are implemented, they will deliver long-term reductions in the total cost of ownership for IT services offered State-wide. More specifically, these initiatives are designed to reduce the acquisition costs for IT technology and services, reduce the on-going operating costs associated with providing IT services to State agencies, and provide for the elimination of duplication or overlapping services. This transformation is deeply rooted in the deployment of standardized processes that will improve the quality of services provided to agencies. These processes provide a feedback loop for continuous process improvement, which keeps costs low and quality high.
4.1 Leading Practices
The strategic objectives of productivity and quality can be accomplished by leveraging three basic leading practices: centralization, platform consolidation, and standardization.
Centralization
Centralization and consolidation are the processes of shifting technologies and services from many disparate instances and locations into a single technology or location. It often includes consolidating from many physical devices and applications to a few. Capgemini recommends that all infrastructure management services be centrally located and centrally managed by the ISD organization. This strategy is to move or consolidate these hardware platforms and associated support services from the individual agency data centers, server rooms, or closets to the new green data center located in the Office of State Finance building. The new data center is energy efficient, secure, and well-positioned for automation of
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routine support services designed to significantly reduce the operational costs while improving the quality of services to the agencies. Centralization also makes it easier to create an effective disaster recovery strategy while minimizing labor and technology redundancies.
Platform Consolidation
The term platform is meant to collectively reflect mainframe computers and server type computers that may run Windows, UNIX, AIX, Linux, and other operating systems. Platform consolidation is an approach to the efficient use of computer resources in order to reduce the total number of platform devices or locations that an organization requires. The practice developed in response to the problem of platform sprawl, a situation in which multiple, under-utilized servers take up more space and consume more resources than can be justified by their workload.
The traditional approach to building-out the infrastructure platform for a data center was to dedicate one server to one application. This model requires the over-provisioning of processing, memory, storage, and other peripherals. The rapid evolution of the business environment and continuing advancement of technology has created an opportunity to replace this static definition of a data center and generate a new, more efficient, virtual operating environment.
Application servers are sized for a specific application, with the selection of the central processing unit, memory, storage, and input/output capabilities based on the projected peak needs of that one application. The utilization of all of these components is often well below the maximum since few applications run at their peak load all of the time. This over-provisioning wastes significant resources.
Standardization
Put at its simplest, a standard is an agreed upon, repeatable criterion for execution. It is a published document that contains a set of technical specifications or other precise criteria designed to be used consistently as a rule, guideline, or definition. Productivity gains and cost reductions can be achieved by standardizing across technologies (e.g., platforms, applications, etc.), data standards, processes, procurement, and vendors. Standards help organizations reduce the complexity within their operations. This can lead to higher efficiency because such standards can result in timesaving and enable reuse while allowing for reduction in replications and/or support staff.
Apart from these efficiency aspects, there are the effectiveness gains. Standardization can enable future changes with greater flexibility to support new functions, new technologies, and improve the scalability of existing functions. Standards can result in a lower acquisition and support costs while creating greater economies of scale. Standardization can also lower costs of integration because components are built on a common set of specifications that have demonstrated interoperability. In addition, standards can improve quality, reduce testing, and reduce user training when products change.
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4.2 Key Improvement Opportunities
Based on review of the current situation in the State, areas of improvement have been identified in four key areas: operations, applications, telecommunications, (networks), and infrastructure. These opportunities make up an overall portfolio of improvements. Detailed information on each of these areas can be found in Appendices A through D.
4.2.1 Operations
The ISD is in the process of implementing a few key processes to improve overall IT service delivery. The following information expands this direction across more processes required to sustain a leading practice shared services delivery organization.
The system management framework for IT service delivery illustrated in Figure 4-1 is based on the premise that the flow through the Information Technology Infrastructure Library (ITIL®) framework must be driven by business requirements and deliver measurable business benefits. The future vision for State operations is based on designing and implementing a standard set of processes based on the ITIL® v3, a globally recognized standard for IT service delivery.
Figure 4-1. Systems Management Framework
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This suite of integrated processes is designed to improve the quality and repeatability of service delivery while reducing cost.The proposed implementation approach utilizes ITIL Lite, which builds on the implementation of processes that are closely aligned to State objectives for cost effective and efficient services and allows for continuous improvement. ITIL Lite is a phased implementation of the core ITIL processes needed to immediately improve service delivery to meet defined objectives. The selected processes are usually a sub set of the complete ITIL framework.
These selected processes must be integrated to deliver maximum benefit and reduce operating costs. Figure 4-1 assumes usage of a leading practice software product that is available to the State through a Department of Human Services enterprise license. This tool is already in operation and can speed the implementation and maturity of a number of core processes. Some of the improvements made possible by these in processes and tool sets are:
•
Designation of the key service(s) where the business impact of major incidents is critical and fast recovery is essential.
•
Prioritization of end-to-end service-level agreements from a business perspective to ensure service delivery and accountability.
•
Implementation of end user self services to speed end user response and reduce impact on service desk services. This combined with a service catalog and service request process significantly reduces IT service delivery costs. Some agencies have implemented aspects of this concept.
•
System performance, monitoring service level agreements, and capacity planning will enable the shared service organization to expand its capabilities to meet agency service expectations and improve communications.
•
Focus on driving down defects and improving services without significant investment.
Figure 4-2 summarizes costs and benefits analysis for key operations-related opportunities/initiatives.
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Figure 4-2. IT Operations Estimated Investment and Cost Savings
Area
Initiative
Year 1 ($000)
Year 2 ($000)
Year 3 ($000)
Total ($000)
Transform Costs
Operating/ Ongoing Costs
Cost Avoidance
Hard Savings
Net Savings
Transform Costs
Operating/ Ongoing Costs
Cost Avoidance
Hard Savings
Net Savings
Transform Costs
Operating/ Ongoing Costs
Cost Avoidance
Hard Savings
Net Savings
Transform Costs
Operating/ Ongoing Costs
Cost Avoidance
Hard Savings
Net Savings
Operations
Asset Management
$1,225
$780
$178
-$1,827
$2,439
$5,203
$2,764
$2,751
$13,963
$11,212
$1,225
$5,970
$19,344
$12,149
Operations
Service Desk and Incident Management
$627
$706
$1,105
-$228
$2,876
$4,345
$1,469
$2,876
$4,345
$1,469
$627
$6,458
$9,795
$2,710
Operations
Problem Management Improvements
$462
$106
-$356
$324
$158
-$166
$324
$158
-$166
$462
$648
$422
-$688
Operations
Change Management
$248
$528
$637
-$139
$633
$2,187
$1,554
$633
$2,187
$1,554
$248
$1,794
$5,011
$2,968
Operations
Automated Event Monitoring and Control
$1,588
$252
$603
-$1,237
$724
$1,494
$770
$724
$1,494
$770
$1,588
$1,700
$3,591
$303
Operations
Availability Management
$490
$688
$198
$193
$1,375
$1,182
$193
$1,375
$1,182
$490
$386
$3,438
$2,562
Operations
Capacity Management
$1,108
$129
-$979
$372
$246
-$126
$1,108
$372
$375
-$1,105
Operations
Service Request Catalog
$1,276
$107
$2,590
$1,421
$702
320
$2,590
$2,208
$702
$320
$2,590
$2,208
$1,276
$1,404
$747
$7,770
$5,837
Operations
IT Service Level
$346
$144
$509
$19
$237
$509
$272
$237
$509
$272
$346
$618
$1,527
$561
Operations
IT Chargeback
684
$168
-$852
$684
$168
-$852
Operations
ITIL Training
$104
-$104
$52
-$52
$52
-$52
$104
$104
-$208
Operations
CSI Marketing and Communications
$243
$251
-$494
$362
-$362
$362
-$362
$243
$975
-$1,218
Total
$6,609
$2,661
$107
$6,416
-$2,747
$1,108
$8,542
$320
$17,990
$8,660
$684
$9,394
$320
$26,867
$17,109
$8,401
$20,597
$747
$51,273
$23,019 The State of Oklahoma | Capgemini Government Solutions
4.2.1.1 Operations Initiatives
Key operations area initiatives are defined as:
•
IT asset management centralization.
Centralize all IT asset management in the State with one process and tool set that can be leveraged throughout all agencies.
•
IT service desk consolidation and incident improvements.
Consolidate State IT service desks using a single tool suite to support incident management improvements, integration with alert monitoring, single alarm paging, and enable virtual service desks where desired/required.
•
Problem management improvements.
Problem management minimizes the impact of incidents and maximizes communications and teaming effectiveness to restore services and eliminate the root causes.
•
Change management improvements.
Consolidate change management into one consistent process and establish a change approval mechanism to communicate system changes and risk across the supporting services.
•
Automated event monitoring and control.
Develop a tiered monitoring architecture to support the system requirements, service-level agreements, and performance of shared services across the State.
•
Availability management.
Develop and implement a process to monitor critical business services availability to ensure service levels are met and variances are reported and resolved through the use of incident and problem management.
•
IT service levels.
Aligns business expectations with the capability of IT services delivery to monitor and deliver according to agency business expectations.
•
Service request and service catalog management.
Automate the available standardized services provided by State IT services that can be ordered, approved, tracked and monitored to effectively and efficiently deliver IT services.
•
ITIL training.
ITIL training will rally IT resources around a common glossary of terms and definitions that enable people across the agencies to speak the same language and use consistent centralized and consolidated processes to deliver consistent, high quality IT services.
•
Continuous service improvement, marketing, and IT communications.
Since IT will be run like a business, continuous service improvement needs to be managed and aligned with holistic State IT needs in harmony with agency requirements. A marketing and communications function will help establish effective communications mechanisms for relationship managers and agency leaders throughout the State.
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Other initiatives suggested for Year 3 are:
•
IT capacity planning implementation.
Effective utilization of available resources is critical to optimize the State’s IT investments. With capacity planning and management, the State will have the capability to monitor and plan service capacity.
•
IT chargeback and IT cost allocation.
Shared service cost transparency is critical to enable State agencies to budget for IT services and understand the cost of various levels of service.
IT Asset Management Centralization
Overview
IT asset management is a critical process to control and manage IT assets and enable other IT support process with valid inventory information to increase the effectiveness and efficiency of IT delivery.
Recommendation Summary
IT asset management process and tools need to be standardized and centralize across the State agencies to optimize the resource and capacity management capabilities and to insure that proper control and oversight occurs on all IT assets. Standard use of bar codes and automated inventory agents to monitor and record all changes to asset attached to the State network is recommended.
Recommendation Benefits
IT information sources, consulting companies, and vendors all indicate that IT asset management can generate savings on assets from 20 to 50 percent. This includes items such as:
•
Provides for full life cycle management of IT assets.
•
Software licensing audit compliance optimizes software investments through reallocation (Gartner 20 to 25 percent become shelfware).
•
Supports consolidation of vendor contracts.
•
Reduces support costs through optimizing refreshes and reuse of new equipment.
•
Assist with justifying software and hardware investment.
•
Allow audits for disappearing assets.
•
Stops overbuying and unauthorized usage.
•
Reduces support costs through optimizing refreshes and reuse of new equipment.
•
Volume licensing agreement and management.
•
Tracks asset life cycle changes.
•
Tracks cost and control asset data.
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•
Supports incident, service desk, service request, and change processes with enabling information.
•
Key enabler for configuration management process and database.
•
Provides key data for IT chargeback and TCO application.
•
Portfolio management process input enabler to enable optimization of this portfolio.
•
Enable data to support maintenance analysis for potential cost savings.
The key areas for the initial process scope are servers, desktops, network, storage, and software.
Implementation Plan
The implementation plan is a standard ITIL process plan with focused usage of a fully developed process model, even if the entire model is not implemented to enable full understanding of its components and integration. An IT asset management core group needs to be responsible with delegated duties to other IT service support staff. The plan follows a plan, design, configure, test, train, and iterative rollout plan.
IT Service Desk Consolidation and Incident Improvements
Overview
IT service desk consolidation will consolidate resources and standardize the IT service desk function for all agencies. The service desk will support the incident, problem, and service request processes using the ITIL framework. Lead practice tool implementation is recommended using the enterprise license from Department of Human Services. After due diligence a determination on what service desk remain virtual can be made. DHS has software and process upgrade planned and budgeted; combining this effort to create a State-wide service is recommended. In addition improving the incident process will provide enhanced service improvements to end customers.
Recommendation Summary
Consolidate and standardize the service desk process and tool across the State agencies, reducing the current number of separate organizations, software, and processes.
Recommendation Benefits
Significant cost savings are attributed to FTE reductions, software license savings, and more effective and efficient usage of service desk resources, end user self help, and automated interface with monitoring tools. A service desk modeling tool was used to estimate the staffing requirements and was very conservatively calculated. State IT and Telecommunications Modernization—Phase 1—Assessment | 4-9
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Implementation Plan
The implementation plan utilizes the standard ITIL process implementation approach to improve the incident and problem process. The service desk consolidation will be timed to parallel the data center consolidation of various agencies. Key activities of this implementation are listed below.
•
Plan and scope project phases consolidating other agency service desks (help desks).
•
Develop service desk improvements to scale the service for State-wide support.
•
Define software configuration, reporting, dashboard, and end user web access requirements enhancements.
•
Strengthen interface with incident, problem, and service request process requirements.
•
Interface with system monitoring tools for automated incident recording and assignment.
•
Develop and test software and process improvements.
•
Develop and train process users.
•
Rollout users (service desk level 2 support including applications).
•
Develop and distribute performance reports, dashboards, end user access.
•
Develop improvement plan focused on self help.
Problem Management Improvements
Overview
Problem management minimizes the impact of incidents and maximizes communications and teaming effectiveness to restore services and eliminate the root causes. The problem management team will:
•
Own the end to end management, lead enterprise wide Major Incident Response Teams (MIRT),Coordinate all major incident status communications
•
Co-host a daily enterprise wide operations meeting.
This initiative should be implemented with the incident and service desk improvements because of the tight process and tool integration. It also will take advantage of the leading practice tool suite from the Department of Human Services. The State of Oklahoma | Capgemini Government Solutions
Recommendation Summary
Sustaining application and infrastructure service delivery to an acceptable level and resolving repeating incidents to minimize the end user impact and IT service staff impact, problem management using ITIL framework leading practices provides this capability.
Recommendation Benefits
There are models that utilized detailed incident data and availability statistics to calculate the overall cost savings by minimize end user outages and impacts. In addition, mitigating the IT support staff efforts to constantly resolve repeating incidents generates resource savings. However, since this was a high level availability and State-wide incident analysis, minimal financial savings could be calculated.
Implementation Plan
The implementation plan follows the ITIL implementation project plan approach. In this situation the process has to be created and it is assumed that the vendor partner will supply the mature process detail that will only need to be slightly modified for the State. This new process requires a small focused staff. This project should be executed with the incident and service desk initiative.
•
Plan and scope project phase.
•
Define process improvements necessary to scale the process.
•
Define software configuration and reporting requirements.
•
Refine the process model and procedures.
•
Interface with incident, problem, change management, and service request process requirements.
•
Develop repeatable training materials.
•
Develop and procure test software.
•
Rollout.
•
Develop and distribute performance reports and publish on wiki.
Change Management Improvements
Overview
Change management is the coordination and controlling process for all changes to the State’s production environments. This process ensures that changes do not conflict, risk assessment is properly analyzed, security practices are met, and end user notification is sufficient to enable the end user community to plan around the change and expected outages. This also enables the State agency IT relationship managers to review and approve all changes impacting their users.
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Change management processes based on ITILv3 will be implemented using the leading practice software in use by the Department of Human Services as a base with active interfaces between incident, problem, and service request. The change management team will own the end-to-end management and execution of the process, ensure each change is executed and closed at approved times, ensure each change is constructed and tested to minimize risk, host enterprise-wide weekly change advisory boards, lead post-implementation reviews as needed, conduct root cause analysis reviews, and coordinate communication collateral needed to support the process.
Recommendation Summary
Sustaining a State environment of shared services requires a consistent, managed process to minimize the service disruption risk to the State’s end user population.
Recommendation Benefits
Change management provides oversight across the State’s IT services to minimize disruption, assess risk, and align multiple change schedules to mitigate conflicts. Since the study did not do a detailed change risk assessment, the calculated savings on ineffective changes could not be measured. However, analysis of the current full-time equivalent headcount associated with change management found the State was much higher than industry benchmarks indicating a savings during consolidation and standardization of the process.
Implementation Plan
This process would follow the ITIL framework leading practices and also utilize the leading practice tool from the Department of Human Services, which has an integrated change management module that allows cross-process information to be used to further the overall process execution effectiveness.
•
Plan and scope project phases.
•
Develop process requirements and tool improvement and integration requirements.
•
Develop software configuration and reporting requirements.
•
Interface with incident, problem, service request, and IT asset
management.
•
Configure and test software.
•
Develop a repeatable web/video training course.
•
Train users (includes project managers, service providers, developers, and IT management).
•
Rollout in parallel with the data center consolidation and server optimization (detailed in the infrastructure opportunities section of this document).
•
Develop and distribute performance reports and publish on a wiki.
•
Rollout to the remaining agencies.
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Automated Event Monitoring and Control
Overview
Automated event monitoring and control standardizes event and monitoring software and procedures to capture application and service alerts and notify incident management to activate the service response.
Recommendation Summary
Sustaining high quality operations of shared services requires exception based monitoring and response to reduce service delivery costs and optimizes response efforts and mitigates end user impacts.
Recommendation Benefits
Cost savings are attributed to full-time equivalent reductions, software license savings, more effective and efficient usage of support resources, and tiered monitoring.
Implementation Plan
•
Plan and scope project phases.
•
Develop ITIL event, monitoring and control process and procedures and tool requirements.
•
Select and procure monitoring tool set, if required and define tier
monitoring requirements.
•
Develop procedures for implementing monitors and alerts.
•
Interface with incident process.
•
Develop and test software.
•
Train monitoring team on software and procedures.
•
Rollout in parallel with the data center consolidation and server
optimization.
•
Develop and distribute monitoring log analysis reports.
•
Develop Phase 2 improvement plan for next set of infrastructure services.
Availability Management
Overview
Implement standardized availability monitoring for business and shared services that enables tracking, reporting, and supports the service level management process. Availability monitoring monitors and reports the mean time between failures and tracks the availability and utilization of business services and enables the accountability of services levels.
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Recommendation Summary
Availability is a core ITIL process to sustain the shared services environment and enable effective dialogue with the relationship managers, agency leadership, and IT service providers to meet end user expectations.
Recommendation Benefits
There is considerable cost avoidance through availability management by focusing on increasing service availability, aligning service expectations with architecture, and by minimizing maintenance service disruptions. Since business system outage data was not available, calculation of this cost avoidance was not possible.
Implementation Plan
Availability is an ITIL process and the project plan follows this process improvement approach. The critical element is to understand the needs of the information audience and the level of detail required.
•
Plan and scope the project.
•
Develop ITIL availability management process and procedures.
•
Integrate process with monitoring and control, incident, and service level management.
•
Design and develop availability reporting and web portal reporting
capacities.
•
Develop and test software and reports.
•
Automate data gathering and reporting.
•
Determine critical business services and implement with existing shared services. The implementation should then be included as part of the data center consolidation and server optimization involving production servers.
•
Implement availability management for all production services having a service level target defined.
Service Catalog and Service Request
Overview
Service request is already in operation in the Office of State Finance and some of the other larger agencies using different processes and software tools. This can be consolidated using the Department of Human Services leading practice tool to simplify the overall support and end user interface for service request. Service request requires a consolidated service catalog that the Office of State Finance has initiated but will have to be expanded as more services are introduced into the shared environment.
The proposed leading practice solution re-uses current State-owned software and scales to support the State’s IT users.
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Recommendation Summary
Consolidating the IT service request workflow and service catalog provides opportunities to optimize the work requests, delivery flow, and service automation across multiple agencies to maximize economies of scale in delivery and support these services and processes.
Recommendation Benefits
The solution triggers all the necessary automated processes and enables the service desk to monitor and ensure services meet communicated expectations. Self-service capabilities allow employees to track the status through online inquiry. Business benefits are significant and include higher employee productivity, service provider productivity, and effective coordination and expectation management.
The service desk model takes the service requests into consideration in the staffing model to meet acceptable service measures. This consolidation provides a full-time equivalent reduction across State agencies.
Implementation Plan
Service request and service catalog are integrated processes with the service desk but do provide separate services to the end users. The leading practice toolset also allows end users self-service and review status further reducing the service desk effort. This project plan should closely parallel the service desk and incident project.
•
Plan and scope project phases.
•
Develop service request and service catalog system requirements.
•
Develop workshops to review existing service requests and create service catalog items.
•
Define software configuration and reporting requirements.
•
Configure service request software and initiate service catalog definitions.
•
Test service requests and the catalog.
•
Develop and train process users.
•
Rollout in parallel with the data center consolidation and optimized
servers.
•
Develop and distribute performance reports and publish performance in the web portal.
•
Rollout to all agencies.
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Service Level Management
Overview
Service level management and reporting provides the process and enabling tools to establish, monitor, and improve business-aligned IT service quality through a constant cycle. Service levels are reviewed with agency IT CIOs and directors on a periodic basis to ensure that their services are delivered to meet expectations. When service levels are breached an incident will be opened and tracked to resolution.
Recommendation Summary
Service level management is critical to providing a measurable, repeatable, and accountable process and mechanism to the agency’s relationship manager to enabling communication about the delivered IT shared services.
Recommendation Benefits
This will provide the process to communicate with the agency’s business leadership to understand their business needs and demands for IT shared services. It also enables ISD to review service expectations, service costs, and communicate deficiencies and corrective actions. Service level management also provides the alignment capabilities to match the service expectation and the service delivery. Costs can be minimized when these are aligned.
Implementation Plan
Service level management has multiple processes that require integration. Careful planning and synchronization with other projects needs to be considered.
•
Plan and scope project phases.
•
Develop ITIL V3 service level processes based on the selected enabling tool.
•
Select and procure tool set.
•
Define software configuration and reporting requirements.
•
Interface with incident process.
•
Develop and procure test software.
•
Develop training materials and train process users.
•
Rollout to critical production systems and shared services.
•
Develop and distribute performance reports and publish monthly reports on the web portal.
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IT Chargeback and Cost Allocation
Overview
IT chargeback and cost allocation service provides the information on the service usage and cost to enable accurate service billing. Annual service rate updates are provided so IT budget forecasts can be estimated. The process includes activities to gather the data, report usage and costs, provide forecasts, and optimize service costs through benchmark analysis.
Recommendation Summary
Most shared service IT organizations need a thorough mechanism for service billing and service cost accounting. The level of requirements analysis is similar to outsourcing solutions.
Recommendation Benefits
Depending on the level of change required with the current Office of State Finance process, a more formal and mature solution may be necessary. A less costly commercial off-the-shelf (COTS) solution or software as a service (SaaS) may be available, reducing customization, and providing ongoing support.
Implementation Plan
This plan is a standard approach that Capgemini utilizes for outsourcing chargeback services and was adapted for this situation. Most of the tasks are similar and the effort would vary depending primarily on the level of reporting required.
•
Plan and scope project phases.
•
Define chargeback process and annual update procedure.
•
Define IT chargeback requirements.
•
Select and procure software or SaaS, if required.
•
Define software configuration and reporting requirements.
•
Develop and procure test software.
•
Develop and train users and educate agencies on chargeback reporting.
•
Rollout in parallel with the data center consolidation and server
optimization.
•
Develop and distribute reports and publish on the web portal.
State IT and Telecommunications Modernization—Phase 1—Assessment | 4-16
The State of Oklahoma | Capgemini Government Solutions
ITIL Training
Overview
The Office of State Finance and a few other agencies are moving forward with standardizing on utilizing an ITIL framework for operational and transition processes. We recommend continuing and accelerating this training. ITIL training is a requirement for standardizing and simplifying IT process supporting operations, service transition, and service design. The approach is to focus on the core processes necessary to support a centralized environment of shared services. Training can be provided via the web or on-site. Ongoing training should be a continuing initiative.
Recommendation Summary
ITIL training is required for IT service delivery process and tool training to meet the required service expectations and process improvements necessary for the IT consolidation and improvements.
Recommendation Benefits
ITIL is an international IT process framework standard that is adaptable to the State’s service requirements. It provides training materials, a standard glossary, and other leading practice materials to effectively and more efficiently improve IT service delivery.
Implementation Plan
•
Plan and scope project phases.
•
Identify course participants by role (foundations and then advanced training).
•
Examine web-based foundations classes and onsite or local advanced training courses.
•
Prepare training plan and budget.
•
Set-up web page under IT web portal to communicate ITIL and training requirements.
•
Schedule employee training for ITIL foundations.
•
Schedule employee training for advanced ITIL certification in operations, transition, and design.
•
Update and maintain knowledge base on ITIL web portal for training materials and ITIL glossary.
State IT and Telecommunications Modernization—Phase 1—Assessment | 4-17
The State of Oklahoma | Capgemini Government Solutions
Continual Service Improvement, Marketing, and IT Communications
Overview
Consolidated continual service improvement responsibility will provide the audit and service performance oversight for the ISD services. Governance over the requested service improvements must be analyzed and prioritized and this process aligned with overall IT service management. The ITIL framework provides this controlling mechanism.
As it is recommended the State have a centralized IT service organization, it is critical to maintain effective communication to the other agencies, bureaus, and offices to assist with providing information on the services available and understand the demand for new services.
Overall IT communications to the other agencies and executive branch must be centralized to improve the messaging, align with CIO objectives, and utilize standard communication methods. This will also include communications to the wide range of end users and stakeholders.
Recommendation Summary
The centralized IT organization consolidates these activities into one organization. During consolidation, new processes and procedures are required to meet agency and customer requirements. These three key activities are essential to professionally represent the consolidation of the State IT organization.
Recommendation Benefits
•
Provide consistent communications and messages to stakeholders.
•
Continually improve the IT service delivery process through effectiveness and efficiency analysis.
Implementation Plan
•
Define the activities for continual service improvement, marketing, and IT communications.
•
Develop RACI (Responsible, Accountable, Consulted, and Informed) matrix to align responsibilities and accountability.
•
Define the standard communication template, medium, and cadence calendar.
•
Define the marketing approach and techniques to engage other State agencies to utilize the IT consolidated shared services.
State IT and Telecommunications Modernization—Phase 1—Assessment | 4-18
The State of Oklahoma | Capgemini Government Solutions
Capacity Planning
Overview
Standardize a capacity planning service for the shared service applications and infrastructure services planned for FY2013. This service manages required capacity based on business drivers to meet the service level metrics. Capacity planning will monitor, collect, analyze, and report on shared service capacity usage and trends.
Recommendation Summary
Since applications will receive a due diligence review as they are consolidated and optimized, the need for the capacity planning process can be postponed until FY2013.
Recommendation Benefits
Capacity planning continually aligns the State application and shared services to the service level agreements and takes into consideration the changes in demand for these services. If the demand drops, less resources are required and can be used elsewhere or eliminated. If the demand increases, it is important to meet a higher level of service without interruption.
Implementation Plan
•
Plan and scope project phases.
•
Select capacity planning staff.
•
Develop capacity planning software requirements.
•
Define capacity planning process based on ITILv3.
•
Select software, procure infrastructure services and implement the infrastructure.
•
Train capacity planning staff.
•
Develop shared service analysis, requirements, and implementation procedures.
•
Implement monitoring and Extraction, Transformation, and Loading (ETL) collection, database loads, and automated analysis.
•
Develop standard monthly capacity reporting and outline annual capacity plan report.
•
Implement capacity planning for share services on a rotating schedule.
State IT and Telecommunications Modernization—Phase 1—Assessment | 4-19
The State of Oklahoma | Capgemini Government Solutions
4.2.2 Applications
The future vision for the State applications portfolio is the consolidation of common finance and administrative applications into a shared services model. This becomes the common framework for running the finance and administration activities across the State. It standardizes typical processes such as budgeting, fixed assets, asset life cycle management, time and attendance, training, payroll services, grant and projects, and procurement processes. These types of initiatives provide the basis for the systematic expansion of a subscription model for software as a service to State agencies with these common requirements.
There will be unique, individual agency-level requirements that are outside of the shared service model. There could also be a sub-grouping of agencies with similar requirements with unique finance and administration requirements based on their missions. For example, the Department of Corrections, the Department of Public Safety, and the State Bureau of Investigation will have unique requirements common to their missions beyond the overall State requirements. For those needs, there may be commercial-off-the-shelf (COTS) software that addresses those requirements. In the event a COTS solution is not available or incompatible with the State’s established common framework/technological standards, a common enterprise-wide application framework (EWAF) development platform with services (internal or external), and Project Management Office (PMO) functions is provided to support those needs with established integration points into the common framework of the shared services environment. It is critical that they integrate into the framework and not create application “creep”, where duplicative process and systems begin to evolve outside of the framework. The combination of good governance and standards will keep this in check. The project initiatives are meant to extend services to a broader set of agencies and standardize and simplify financial and administrative processes.
The future run rate could evolve from a financial shared service model to more of a service bureau activity for and possibly beyond State agencies. This type of initiative provides for the extending of application support model (shared services) in a broader context throughout the State. This provides the common framework that becomes the innovation vehicle for the future run state. In the future state, several things, further described below, will happen.
The shared service environment will continue to expand across the agencies as well as in capabilities to support financial and administrative processes. The learning curve will drive even more efficiencies as the processes are adopted across the agencies and become more mature, along with the use of governance. Governance drives agency needs recognition of common requirements individually, or within subsets, or at large that now become visible and can be addressed. The consistent standardization on the EWAF technology with planned obsolescence and migration strategies in place confirms cost will become measurable and predictable in support of State agencies.
State IT and Telecommunications Modernization—Phase 1—Assessment | 4-20
The State of Oklahoma | Capgemini Government Solutions
An innovation would be to expand the State’s shared service environment beyond State agencies and provide financial and administrative support to counties, cities, and others where it would be more cost effective for them to subscribe to the service, and allow the State to recoup the costs of the ISD operations by spreading it across a larger subscription base. This is not unlike the contracting of police to small cities and counties from larger counties and cities, instead of the smaller city standing their own force. The general trend in government operations is consolidation at many levels of government operations.
Figure 4-3 summarizes the costs and benefit analysis associated with the IT operations key opportunities/initiatives identified in this section.
State IT and Telecommunications Modernization—Phase 1—Assessment | 4-21
The State of Oklahoma | Capgemini Government Solutions
State IT and Telecommunications Modernization—Phase 1—Assessment | 4-22
Figure 4-3. Applications Estimated Investment and Cost Savings
Area
Initiative
Year 1 ($000)
Year 2 ($000)
Year 3 ($000)
Total ($000)
Transform Costs
Operating/ Ongoing Costs
Cost Avoidance
Hard Savings
Net Savings
Transform Costs
Operating/ Ongoing Costs
Cost Avoidance
Hard Savings
Net Savings
Transform Costs
Operating/ Ongoing Costs
Cost Avoidance
Hard Savings
Net Savings
Transform Costs
Operating/ Ongoing Costs
Cost Avoidance
Hard Savings
Net Savings
Applications
HCM Implementation
$2,678
-$2,678
$8,033
-$8,033
$10,711
$10,711
$10,711
$10,711
Applications
Pension
Applications
Budgeting
$1,310
-$1,310
$655
$655
$655
$655
$1,310
$1,310
Applications
Reporting and Analytics
Applications
Fixed Assets
$1,895
-$1,895
$10,738
-$10,738
$12,633
$12,633
$12,633
$12,633
Applications
Financials (Accounting 1/2 and T&E)
$612
-$612
$306
$306
$306
$306
$612
$612
Applications
GIS and Mapping
Applications
GRC
$1,800
-$1,800
$1,800
$1,800
$1,800
$1,800
Applications
CORE Contractor
$18,600
$18,600
Applications
EAFW
$4,056
$4,056
$4,056
$4,056
$8,112
$8,112
Total
$6,495
-$6,495
$20,571
$5,017
-$15,554
$30,161
$30,161
$27,066
$53,778
$26,712
In the applications area, savings result from net full-time equivalency reductions across agencies (due to production enhancements and automation of processes) to be determined by the State. State IT and Telecommunications Modernization—Phase 1—Assessment | 4-23
The State of Oklahoma | Capgemini Government Solutions
Key initiatives for the applications area are defined in the following subsections.
4.2.2.1 Human Capital Management (HCM) Implementation
Recommendation Summary
Given the current release level (9.0), the issues with time and attendance, and the number of shadow systems in support of HR functions, it is recommended the State consider expanding implementation of self-service and determine if the next release of HCM will provide more features and functions in support of a wider adoption of a Shared Services HCM.
Recommendation Benefits
•
The elimination of over 22 shadow systems.
•
The elimination of redundant head count.
•
Indirect savings become real when the State re-deploys/eliminates full-time equivalents.
4.2.2.2 Payroll
Recommendation Summary
It is recommended that the payroll recommendation made in March of 2009 by ISD be integrated into the HCM implementation activity to accomplish further savings beginning as of July 1, 2011 or sooner, eliminate the “Anticipatory Payroll” process, and go to a bi-weekly processing.
Recommendation Benefits
•
Standardize on leading practices for payroll processing.
•
Reduce the number of payroll runs by 25 percent.
•
Eliminate the need for agencies to perform complicated reconciliations of anticipatory and supplemental payroll costs.
•
Reduce the actual time worked before billing the federal government or other third parties.
•
Eliminate the corresponding shadow systems that support these
reconciliation activities.
4.2.2.3 Financials
Accounting Part 1 Recommendation Summary
There are many accounting systems, from small to large, in place in the State today. For agency-specific unique applications with their own financial modules, there is only a need to integrate into the CORE framework. Agencies maintaining separate accounting systems need to be consolidated and such redundancies eliminated wherever possible. The State should consider using the next major upgrade to the CORE financials and determine if the new functionality will aid The State of Oklahoma | Capgemini Government Solutions
the effort and enhance CORE capabilities to ensure a robust financial environment of shared services and reduce the number of interfaces, applications and processes.
Accounting Part 1 Recommendation Benefits
•
The elimination of over 76 shadow systems.
•
Elimination of interfacing requirements and systems.
•
The elimination of redundant IT head count.
•
The indirect savings become real when the State re-deploys/eliminates full-time equivalents engaged in support activities.
•
A single repository data schema enhances Governance, Risk, and Control (GRC) processes.
Accounting Part 2 Recommendation Summary
Applications for the balance of the non-CORE areas are to be incorporated into a EWAF, including the staffing, development, and maintenance of all non-CORE financial and accounting applications previously noted (i.e. HCM, budgeting, financials, and fixed asset initiatives). These applications comprise the remaining 764 (+/-) applications noted as agency-specific applications (i.e., child support, tax, professional licensing). There are also a number of older legacy applications built for agency-specific needs with their own financial modules.
Key points to note with this recommendation are listed below.
•
Buy vs. build analysis is recommended as the replacement option if the COTS product fit addresses the agency’s needs, typically in the 75 percent + range.
•
If build is necessary, use the EWAF platform standards to ensure the applications integrate into the PeopleSoft CORE framework.
•
Given the age of some of the State’s systems, a strategy needs to be in place to replace/integrate applications. In particular anything that is on a mainframe (legacy applications) needs to be prioritized first.
•
It was noted that the State is in the process of acquiring a COTS tax solution for income and sales tax. It is recommended the State look at expanding the solution, if it is not too late in the award cycle, to encompass more than income tax and sales tax processing and consider a revenue shared services approach.
•
Note there is an interrelationship between these applications and the CORE shared service recommendation in the Accounting Part 1. As CORE expands and replaces financial components, the number of these applications declines proportionately to the adoption of shared services by the agencies. Based on previous experiences with widespread adoption of shared services, elimination of applications in a ratio of 2:3 can be expected. For example, the elimination of an agency revenue (accounts
State IT and Telecommunications Modernization—Phase 1—Assessment | 4-24
State IT and Telecommunications Modernization—Phase 1—Assessment | 4-25
The State of Oklahoma | Capgemini Government Solutions
relievable) application and 2 interfaces to integrate into the CORE environment represents a ratio of 1:2; there are no interfacing requirements in CORE accounts receivable. Therefore, the total number of applications in the future state would be in the range of 400 to 700. This assumes 1,500 applications with an average 1:2 ratio, resulting in 500 applications in the “to-be” state with widespread adoption by the agencies.
Basic assumptions on CORE integrations with EWAF include:
•
CORE is the single foundational basis for the HCM and financial
framework for the State.
•
CORE has application program interfaces (APIs) embedded into the major applications (e.g., Accounts Payable, Accounts Receivable).
•
CORE handles most financial aspects when fully deployed throughout the agencies.
•
CORE is not designed to handle unique agency requirements.
•
CORE supports generic finance and administrative activities and processes wherever possible throughout the State.
•
CORE is updated to the most current release level, and maintained going forward on a standard major upgrade path time line, typically 18 to 36 months.
Basic assumptions on EWAF include:
•
Agencies share commonality often in subset groupings; these are all candidates for shared services or EWAF platforms:
-
Payment processing.
-
Licensing and fee activities.
-
Training.
-
Accounts receivable.
-
Document imaging.
-
Geographic Information System (GIS).
•
EWAF encompasses commonality by the processes.
•
Grouping by commonality for data warehousing initiatives.
•
Grouping by commonality for business intelligence and analytical tools.
•
Shared automated tools, workflow, content management, and portals.
It is recognized that some agencies will have requirements specific to the agency. In this model, these discrete COTS/custom built systems need to leverage CORE/EWAF where it is appropriate. For example, a payment is a payment, no matter how it is authorized. The specialized requirements for the agency-specific applications are to enable the authorization and transmit the payment instruction to CORE or other shared services applications and not replicate the payment process. The State of Oklahoma | Capgemini Government Solutions
Basic staffing assumptions relative to EWAF:
•
Establishment of centers of excellence on the common framework as needed.
•
Pools of functional rich talent to perform the necessary analysis.
•
Must be led by senior application architect(s).
•
Must be staffed by senior and junior business analysts, in shared pools and interdisciplinary skills sets for analysis gathering, refinement, and recommendations.
•
Cross pollination of skills within talent pools is critical to the success of this model as bot

|
In partnership with
April 1, 2011 The State of Oklahoma
Information Technology and Telecommunications Transfer, Coordination, and Modernization Study Phase 1—Assessment
Developed by:
Capgemini Government Solutions LLC
In partnership with:
The Chief Information Officer
The Information Services Division of the Office of State Finance Preface
The 2009 Oklahoma State Legislature passed House Bill 1170—the Oklahoma Information Services Act—and created the position of Chief Information Officer (CIO), appointed by the Governor, to also serve as Secretary of Information Technology and Telecommunications, with jurisdictional responsibility related to the information technology and telecommunications systems of all State agencies.
House Bill 1170 also stated that within 12 months of appointment, the first CIO should complete, for all State agencies:
a.
An assessment of the existing and planned information technology and telecommunication systems (including but not limited to hardware, software, contracts, personnel, capabilities, facilities, networks, current and planned projects, and budgets).
b.
An assessment of the implementation of the transfer, coordination, and modernization of all information technology and telecommunications systems.
This document presents the Phase 1 assessment. The key short- and long-term objectives of this assessment are to build upon and transform the State’s current information technology- and telecommunications-related organizations, structures, technologies, capabilities, processes, facilities, practices, tools, standards, architectures, supply chain relationships, and workforce. State IT and Telecommunications Modernization—Phase 1—Assessment | i
The State of Oklahoma | Capgemini Government Solutions
Table of Contents
1
Introduction
................................................................................................
1-1
2
Executive Summary
...................................................................................
2-1
3
Approach and Current Situation
.............................................................
3-1
3.1
Approach
...............................................................................................
3-1
3.2
Current IT Environment
........................................................................
3-3
3.2.1
Current State Analysis—Operations
..............................................
3-4
3.2.2
Current State Analysis—Applications
...........................................
3-5
3.2.3
Current State Analysis—Telecommunications and Network
........
3-8
3.2.4
Current State Analysis—Infrastructure
..........................................
3-9
3.3
Financial Observations
........................................................................
3-13
3.4
Human Capital/Operations
..................................................................
3-15
4
Portfolio of Improvements
........................................................................
4-1
4.1
Leading Practices
..................................................................................
4-1
4.2
Key Improvement Opportunities
...........................................................
4-3
4.2.1
Operations
......................................................................................
4-3
4.2.2
Applications
.................................................................................
4-20
4.2.3
Telecommunications
....................................................................
4-30
4.2.4
Infrastructure
................................................................................
4-36
5
Organizational Improvements
..................................................................
5-1
5.1
Proposed ISD Functional Organizational Model
..................................
5-2
5.2
IT Governance Model
...........................................................................
5-3
5.3
Centralized Enterprise Infrastructure/Shared Services Model
..............
5-5
5.4
The Agency-driven Governance Model
................................................
5-7
5.4.1
Implement State-wide Portfolio and Project Management
............
5-8
5.4.2
Operationalize IT Governance
.......................................................
5-9
5.4.3
Enact Recommended Organizational Changes
............................
5-11
5.4.4
IT Governance Communication
...................................................
5-11
5.4.5
Link Enterprise Architecture to the IT Governance Framework . 5-13
State IT and Telecommunications Modernization—Phase 1—Assessment | ii
6
The State of Oklahoma | Capgemini Government Solutions
Recommendations/Roadmap
....................................................................
6-1
6.1
Phase 0—Immediate Needs (FY2011)
..................................................
6-1
6.2
Phase 1—Organizational and Key Infrastructure Initiatives (FY2012) 6-2
6.3
Phase 2—Mid-Term Implementations (FY2013)
.................................
6-3
6.4
Phase 3—Closure and Next Steps (FY2014)
........................................
6-4
Appendices .......................................................................................................... A-i
Appendix A—Infrastructure Findings,Trends, and Recommendations
.........
A-1
Appendix B—Data Network and Telecommunications Findings, Trends, and
Recommendations
...........................................................................................
B-1
Appendix C—Applications Blueprint
............................................................
C-1
Appendix D—Operations Findings, Trends, and Recommendations
.............
D-1
Appendix E—Governance Recommendations
................................................
E-1
Appendix F—Supporting Financial Data
........................................................
F-1
Appendix G—Survey/Scan
.............................................................................
G-1
State IT and Telecommunications Modernization—Phase 1—Assessment | iii
The State of Oklahoma | Capgemini Government Solutions
Table of Figures
Figure 2-1. Net Savings by Area Initiative and Operating Recommendations
....
2-3
Figure 2-2. Estimated Investment and Cost Savings
...........................................
2-7
Figure 2-3. High-Level Implementation Roadmap
..............................................
2-9
Figure 2-4. Summary of Impacts
.........................................................................
2-9
Figure 3-1. Manual Survey Response Tracking
..................................................
3-1
Figure 3-2. Survey Tracker—Qualitative Statistics—Tier 1
...............................
3-2
Figure 3-3. Oracle Insight Initiatives
...................................................................
3-7
Figure 3-4. Summary Infrastructure Current State
............................................
3-12
Figure 3-5. 2009 Actual Expenditures and 2011 Headcounts and Costs
...........
3-13
Figure 3-6. Budget to Actual Comparison FY2009 and FY2010
......................
3-14
Figure 3-7. Comparison of Planned vs. Actual Expenditures FY2009
..............
3-14
Figure 4-1. Systems Management Framework
....................................................
4-3
Figure 4-2. IT Operations Estimated Investment and Cost Savings
....................
4-5
Figure 4-3. Applications Estimated Investment and Cost Savings
....................
4-22
Figure 4-4. Before and After Telecommunications Network (Oregon)
............
4-32
Figure 4-5. Telecommunication Estimated Investment and Cost Savings
........
4-35
Figure 4-6. Agency Bundles
..............................................................................
4-38
Figure 4-7. E-mail Summary, Recommendations and Benefits
........................
4-43
Figure 4-8. Compute Optimization Findings and Recommendations
...............
4-46
Figure 4-9. Storage Transformation Findings and Recommendation Summary 4-48
Figure 4-10. Infrastructure Estimated Investment and Cost Savings
................
4-50
Figure 5-1. IT Governance Organizational Structure
..........................................
5-1
Figure 5-2. ISD Functional Organization Model
.................................................
5-3
Figure 5-3. IT Governance Model
.......................................................................
5-4
Figure 5-4. Decision Making Process
..................................................................
5-8
Figure 5-5. Estimated Investment for Governance Implementation
..................
5-15
Figure 6-1. Roadmap/Master Plan
.......................................................................
6-1
Figure 6-2. Prioritized Roadmap
..........................................................................
6-2
The State of Oklahoma | Capgemini Government Solutions
State IT and Telecommunications Modernization—Phase 1—Assessment | 1-1
1 Introduction
House Bill 1170 created the first State-wide position of CIO and Secretary of Information Technology. It also necessitated a comprehensive assessment of the State-wide use of information technology and telecommunications systems to develop practical short- and long-term plans for modernization of State systems, infrastructure, and services.
The State of Oklahoma (“the State”) is facing a budget deficit estimated at $600 million as it begins the process of preparing the FY2012 budget. This represents a shortfall of 11.3 percent of the FY2011 budget. State agencies are being directed to prepare plans to reduce their costs by 3 to 5 percent. To help reduce ongoing costs, the State needs to identify improvements to the way it conducts its business and provides services to its constituents (citizens, the State business community, and workers). There needs to be a view to a long-term solution generated by significant productivity gains and enhancements that will offset State budget reductions while providing ongoing savings and cost containment.
The State—like many other states, cities, and counties—typically implements a wide-ranging, wholesale headcount and/or expense reduction approach for most of its initial cost cutting. It does achieve immediate results, but only for the short-term. This is because the systemic causes of the rising costs are not evaluated and addressed.
The solution, in part, is the use of technology to automate, standardize, simplify and provide accessibility to the State’s diverse constituents. When leveraged correctly, technology can be one of the most effective levers in achieving a sustainable savings model for the State.
It was noted by Governor Fallin in her February 2011 State of the State Address that information technology (IT) and infrastructure consolidation was the most effective way to reduce costs and could keep overall agency cuts in the 3 to 5 percent range. Implied in this statement is the reality that failure to consolidate will result in larger future cuts in agency budgets to fund duplicative IT expenditures and processes by the agencies.
The Governor and State legislators know the current IT model is not sustainable to meet the current or future needs of the State for technology resources. Consolidation and centralization of IT resources must occur. The State has already taken the first step in this direction with the announcement of the hard freeze on the hiring of all full-time IT resources, as noted in the Governor’s address in February of 2011. A second key step was the adoption of an IT modernization program estimated to cost $100 million. State IT and Telecommunications Modernization—Phase 1—Assessment | 1-2
The State of Oklahoma | Capgemini Government Solutions
As the Governor stated, “Oklahoma only needs one financial application—not 76.” Lasting productivity improvements require a shift in the way technology is acquired, managed, and deployed in the State. If we look at the States of Texas and Virginia as two examples, they shifted cost elsewhere without addressing the core issues and challenges negatively impacting productivity and costs. For all practical purposes, they are now engaged in rebuilding their respective IT infrastructures again. The State has valuable lessons learned from these models.
Since states can’t print money and many are debt averse, IT consolidation is the only sure way to reduce IT costs. The State is at a legislative precipice, but needs to execute IT consolidation initiatives to ensure immediate and long-term IT savings.
The two most frequently undertaken types of IT consolidation are physical consolidation and application consolidation. A review of states by the National Governors Association Policy Center found that at least 42 states have undertaken consolidation initiatives in recent years; 32 have implemented physical consolidation and 26 undertook application consolidation. Oklahoma is in good company in its endeavors.
The nature of the State’s business revolves around basic activities that lend themselves to the concept of shared services, or more simply put, the re-use of applications in the support of an agency’s mission by one or more agencies. The most fundamental ones are:
•
Eligibility. For federal, state, and local programs from Medicaid to child support.
•
Revenue. Income tax, sales tax, business taxes, fees, and other revenues collected in the State.
•
Appropriation and expenditure accountability. Appropriation and expenditure accountability is the same across the State for every agency.
•
Cost accounting. This includes programmatic initiatives in the State (1) with one or more funding sources involved and (2) requiring accountability beyond the appropriation level.
•
Imaging. Documents are a byproduct of government and need to be stored and retrievable.
The adoption of a shared services model is how the State eliminates duplicative systems. This lesson has been learned from other states with successful shared services initiatives including the State of Ohio, the State of Connecticut, and the State of Colorado.
The passage in 2009 of House Bill 1170—the Oklahoma Information Services Act (“the Act”)—created the position of CIO, appointed by the Governor, to also serve as Secretary of IT and Telecommunications with jurisdictional responsibility related to the IT and telecommunications systems of all State agencies. State IT and Telecommunications Modernization—Phase 1—Assessment | 1-3
The State of Oklahoma | Capgemini Government Solutions
House Bill 1170 required that a comprehensive assessment and analysis of the State-wide use of IT and telecommunications systems be conducted. The purpose for this study and assessment is to develop practical short- and long-term plans incorporating specific recommendations for modernization of State systems, infrastructure, and services to produce a minimum 15 percent first year savings in IT costs based upon FY2009 actual expenditures. The roadmap defined by this project leads to tangible cost savings and additional value-added services for the citizens of the State. It also details recommendations for enhancing State-wide IT capabilities across the entire spectrum of technology applications and infrastructure.
Some examples of our key finding across agencies:
•
76 financial systems (everything from custom Enterprise Resource Planning systems to Solomon to Oracle E-Business to Quick Books).
•
22 unique time and attendance systems.
•
17 different imaging systems.
•
48 reporting and analytics applications (e.g., Cognos, BI, Crystal Reports, Adobe, SAS, etc.).
•
3 different pension systems.
•
30 data center locations.
•
32,643 workstations (20 percent over four years of age).
•
7 mainframes.
•
129 e-mail and BlackBerry servers (with 25 agencies running their own e-mail).
•
Aging systems/processes, service gaps, duplicate services and resource constraints.
Note: As far as we have been able to ascertain, the State of Oklahoma is the only state that has not consolidated its wide-area network to a single network and maintains multiple networks by State agencies.
Higher Education represents a unique challenge in consolidation and standardization as a result of its distinctive mission. It is recommended that a State CIO for Higher Education be created. This may require a bill similar to HB 1170 that created the State CIO position. Similar findings were observed in Higher Education and are noted in the assessment findings. Centralization would yield benefits for the State. State IT and Telecommunications Modernization—Phase 1—Assessment | 2-1
The State of Oklahoma | Capgemini Government Solutions
2 Executive Summary
Cost savings are achievable, service performance can be improved, and organizational structures can be streamlined to deliver more with less. The research information validates that the State can achieve savings of at least 15 percent and potentially more.
Capgemini Government Solutions LLC was engaged by the State to conduct a feasibility study to assess the State’s IT environment and deliver a set of recommendations focused on opportunities to streamline the delivery of IT services and reduce IT operating expenses.
The team gathered information about State resources, computing and work environments, existing policies, technology investments and costs, data usage, applications, and the politics of each agency performing their own technology services. This has been an extensive assessment with careful consideration to the nuances of each individual State agency. Because a centralized formal mandate was not dictated to require agency participation, the team was not able to gather some of the detailed information required to precisely define each and every cost. The team has, however, validated that cost savings are achievable, service performance can be improved, and that organizational structures can be streamlined to deliver more with less. The next project phase, Strategy Prioritization Validation and Priority Strategy Implementation, will finalize this data and launch the short-term strategies to demonstrate progress and short-term savings. The overall approach that Capgemini has taken is:
•
Phase 1—State of Oklahoma Assessment.
•
Phase 2 —Strategy Prioritization Validation and Priority Strategy
Implementation.
•
Phase 3—Implementation Continuation.
•
Phase 4 —Optimization.
•
Phase 5—CIO Measurement and Reporting.
Based on the information provided by the various stakeholders, the assessment by Capgemini was successful in that it accomplished three key things:
1.
The research information validates that the State can achieve savings of at least 15 percent and potentially more.
2.
The team documented the as-is (current) state environment at a high-level, including assets, challenges, and resources, along with the to-be (future) state and the overall roadmap to get there.
3.
The effort also identified the top priority strategies needed to be agreed-to by the CIO, which will form the basis for phase 2.
Capgemini recommends that all technology projects and related expenditures be frozen for the coming year, with the exception of projects that, if not done, would State IT and Telecommunications Modernization—Phase 1—Assessment | 2-2
The State of Oklahoma | Capgemini Government Solutions
disable or severely impair an agency’s ability to deliver services and meet its mission. It is anticipated that very few projects would fall into this category. The recommended “hard freeze” will ensure that only these vital projects will get funded. Federally funded projects would be subject to review and determination of authorization on a case-by-case basis.
The emphasis and the focus of the two major technology IT initiatives recommended by Capgemini in the next year are to have the State execute a comprehensive normalization of the IT infrastructure and the accelerated roll-out of the CORE services to the agencies as an all-encompassing shared service for finance and administration. These should be the only two IT initiatives the State undertakes in the next fiscal year. The primary focus of the State for the next three to five fiscal years should be full implementation of these two initiatives with multiple supporting projects identified by Capgemini. If the State wishes to realize additional first-year savings, this can be accomplished by bonding the necessary investment. The financial estimates currently assume no bonding, to be consistent with the State’s preference to not borrow money which could be appropriated, thereby not committing future leadership to decisions made by current decision makers.
Phase 2, which we recommend starts as quickly as possible before the end of FY2011, will be the mobilization of teams to gather the detailed information for building the specific work plans, measurements, and status reporting constructs needed to achieve the savings identified by this assessment. Five teams are initially proposed and the teams will focus on the following:
•
Team A—Addresses the organization, structure, human resources, IT governance, contracts, and the measurement of savings.
•
Team B—Addresses State applications and how to eliminate the duplication, select the right ones, and place applications into portfolio management.
•
Team C—Addresses the closing of the data centers, segregated by types and sizes of centers (satellite sites, server farms, small sites, medium sites, and the large data centers).
•
Team D—Addresses the infrastructure, network, desktops, and future technologies including cloud and virtualization and the necessary IT service delivery process and tool improvements to sustain the new operational state.
•
Team E—Provides portfolio management and manage acquisition of services required to support the State’s transformation. Responsibilities include issuance of Requests for Proposals and analysis of overall program.
Capgemini has identified initiatives that will exceed $100 million in net savings over three years. Figure 2-1 provides a summary by four main IT areas, over a three-year period. The State of Oklahoma | Capgemini Government Solutions
Figure 2-1. Net Savings by Area Initiative and Operating Recommendations
Net Savings by Area Initiative and Operating Recommendations ($000) (see Year 1 assumptions)
Year 1
Year 2
Year 3
IT Operations/Infrastructure
-$14,837
$28,998
$57,445
Applications
-$6,495
-$15,554
$48,760
Governance
-$1,664
-$1,015
-$1,015
Executive and Administrative
$1,911
$5,538
$9,126
Sub-total
-$21,085
$17,967
$114,316
$111,198
Operations and Maintenance Reduction (One Time)
$23,347
Project Funding Differential (One Time)
$21,000
Total
$23,262
$17,967
$114,316
$155,545
Investment Required for Savings ($000)
Year 1
Year 2
Year 3
IT Operations/Infrastructure
$29,647
$36,417
$29,379
Applications
$6,495
$20,571
Governance
$1,664
$1,015
$1,015
Executive and Administrative
$39
Total
$37,845
$58,003
$30,394
$126,242
Assumptions Year 1
•
The 2011 operating budget for all agency IT spending is approximately $233,183,138. This number was derived from the examination of the general ledger accounts out of PeopleSoft for FY2010 and was estimated for FY2011 based upon the GL account spend as of month end, December 2010. Of the total, federal funds account for $61,718,196. Additionally, $15,815,821 is attributed to fees charged for services between agencies. That nets to $155,649,121, which is the estimated total tax dollars spent on IT in FY2010 and estimated for FY2011, for all executive branch agencies. 15 percent of this comes to $23,347,371.
•
The FY2011 operations and maintenance operating budget ($233 million) is transferred to the State CIO function.
•
Agency IT operations and maintenance full-time equivalents move under the direct control of the CIO.
•
To mitigate a decline in agency service levels during the transition process, we recommend a temporary SWAT team be created to deal with agency issues and allow the CIO’s core team to focus on the transition and integration of personnel, processes, and consolidation initiatives. The team would be comprised of State personnel and possibly external consultants.
•
15 percent of FY2011 operations and maintenance is applied as a reduction to the agency operating budgets for a total of $23 million (this does not include fees for services and federal funds).
State IT and Telecommunications Modernization—Phase 1—Assessment | 2-3
The State of Oklahoma | Capgemini Government Solutions
•
Project budgets are frozen less federal for a net savings of $21 million after $100 million bond is issued against the $121 million.
Investment is required to make the cost containment and savings materialize in the three-year timeframe. Failure to invest will negate the benefits outlined in this document. The State may believe that it has been investing on regular basis, and it has at the agency level, but investment decisions were based on a somewhat limited view driven by each agency’s specific mission. A view that does not consider the State as a whole is inherently a costly and unsustainable model. The investments are not trivial in nature, but it is the classic conundrum, “pay me now, or pay me later”. Later is almost always more expensive for both implementation cost and the lost savings opportunities that can never be recaptured.
In addition to the recommendations detailed within this document, it will be important to review existing laws, policies and current business processes. It may be necessary to modify certain legislative statutes and executive directives to ensure successful transformation of current IT practices. There are several directives that the State should consider acting on immediately to reduce IT costs in the short-term:
•
The Information Services Division (ISD) should be separated from the Office of State Finance effective with the start of the fiscal year. Making the decision now enables ample time for the ISD organizational design and budgeting process to be started and built using an appropriate cost accounting methodology to support financial tracking.
•
Issue a technology bond in the amount of $100 million for the acquisition of the services and equipment necessary to facilitate consolidation of IT infrastructure and services.
•
Centralize the State-wide agency IT budgets effective July 1st, 2011. Centralizing the funding for agency IT related initiatives and services defines a single point of accountability for the approval of IT funds, as well as the proper financial tracking and management. It is recommended this consolidation of funds should be in the amount of $233 million, which is 2011 operating budget by all executive branch agencies. Of this amount, $23 million for year one IT operations and maintenance savings should be set aside as the bond payment for the $100 million technology bond modernization funding recommendation.
•
Develop legislative mandates as needed to provide the State CIO with the ability to initiate, execute, and enforce accountability for all agencies IT resources State-wide. This could be a refinement of House Bill 1170, with one or more amendments.
•
Implement a freeze on all agency-level IT spending for technologies and services that are allocated to individual agency budgets, but not yet spent. As of December 2010, this amount, when adjusted for federal funding, represented $252 million in allocated and unspent dollars.
State IT and Telecommunications Modernization—Phase 1—Assessment | 2-4
The State of Oklahoma | Capgemini Government Solutions
•
Freeze all planned projects or recently initiated projects that are still in the projects early stages. As of the end of December, 2011, there was approximately $165 million in unspent/unapproved funds for planned projects for the Executive Branch. These funds should be applied by the agencies to meet next year’s budget requirements. For projects that are active and still in the planning /design stages, conduct a project review to re-visit the economic models for these projects. A review to ensure compliance to enterprise architecture and technology standards may result in cost avoidance downstream.
•
Consolidate all fiber assets into one agency immediately. This effort should include the consolidation of OneNet into ISD.
•
Higher Education represents a unique challenge in consolidation and standardization as a result of its distinctive mission. It is recommended that a State CIO for Higher Education be created on or before July 1st, 2011; possibly as an amendment to House Bill 1170 with the same authority over higher education as recommended for the State CIO.
•
The Higher Education CIO should have dotted line to the State CIO; the State CIO would maintain veto authority over IT activities, when it appears there is conflict with the State’s consolidation strategies, infrastructure, technical standards, or policies. Budgeting and planning activities would require the State CIO’s approval. There would be an assumption that the State CIO and Higher Education CIO would be in tight coordination on all projects which crosses beyond the higher education mission. It is recommended that this arrangement be kept in place for not more than five years. On or before the end of Year 5, the Higher Education CIO and staff eventually become part of the rest of State IT under the auspices of the State CIO, with the Higher Education CIO becoming a Deputy IT Director.
•
Key benefits to the State on this arrangement is joint purchasing on IT and telecommunications hardware and software, and joint systems development and deployment for items of a utility nature, including e-mail, desktop standards, and fiber networks for connectivity.
•
Consolidate all agency IT personnel and personnel budgets under the direct authority of State CIO. Transition ideally would start prior to July 1st, 2011 and become effective on July 1st, 2011. Higher education is excluded from this recommendation pending action on the above recommendation regarding the appointment of a Higher Education CIO.
•
The State CIO should be given full control and approval for IT acquisitions. This is beyond the current responsibility to only be able review and sign-off on requirements provided by the agency, but to have final approval of all IT acquisitions for all agencies.
State IT and Telecommunications Modernization—Phase 1—Assessment | 2-5
The State of Oklahoma | Capgemini Government Solutions
•
The governance model requires the House Bill1170 Technology Application Board to be replaced with the State IT Advisory Board. This board would advise the State CIO on external events and business insight into State IT practices based on their commercial knowledge. The intention is to utilize external corporate and IT knowledge thought leaders to provide other points of view on State IT opportunities.
•
During the process of initiating recommended changes, it is expected other policy, executive directives, and statutes may be discovered and require changing as the State pursues shared services and consolidation initiatives as this is a dynamic iterative process.
Figure 2-2 provides a list of the specific initiatives with a breakdown of the investment costs, ongoing/operating costs, savings and net benefits by year for the first three years. Several of these opportunities will continue to provide ongoing annual savings and some will require ongoing operational costs. We expect that long-term annual benefits will continue to outweigh annual costs for several years to come.
State IT and Telecommunications Modernization—Phase 1—Assessment | 2-6
The State of Oklahoma | Capgemini Government Solutions
State IT and Telecommunications Modernization—Phase 1—Assessment | 2-7
Figure 2-2. Estimated Investment and Cost Savings
Area
Initiative
Year 1 ($000)
Year 2 ($000)
Year 3 ($000)
Total ($000)
Transform Costs
Operating/ Ongoing Costs
Cost Avoidance
Hard Savings
Net Savings
Transform Costs
Operating/ Ongoing Costs
Cost Avoidance
Hard Savings
Net Savings
Transform Costs
Operating/ Ongoing Costs
Cost Avoidance
Hard Savings
Net Savings
Transform Costs
Operating/ Ongoing Costs
Cost Avoidance
Hard Savings
Net Savings
Operations
Management Asset
$1,225
$780
$178
-$1827
$2,439
$5,203
$2,764
$2,751
$13,963
$11,212
$1,225
$5,970
$19,344
$12,149
Operations
Service Desk and Incident Management
$627
$706
$1,105
-$228
$2876
$4,345
$1469
$2,876
$4,345
$1,469
$627
$6,458
$9,795
$2,710
Operations
Problem Management Improvements
$462
$106
-$356
$324
$158
-$166
$324
$158
-$166
$462
$648
$422
-$688
Operations
Change Management
$248
$528
$637
-$139
$633
$2,187
$1,554
$633
$2,187
$1,554
$248
$1,794
$5,011
$2,968
Operations
Automated Event Monitoring and Control
$1,588
$252
$603
-$1,237
$724
$1,494
$770
$724
$1,494
$770
$1,588
$1,700
$3,591
$303
Operations
Availability Management
$490
$688
$198
$193
$1,375
$1,182
$193
$1,375
$1,182
$490
$386
$3,438
$2,562
Operations
Capacity Management
$1,108
$129
-$979
$372
$246
-$126
$1,108
$372
$375
-$1,105
Operations
Service Request Catalog
$1,276
$107
$2,590
$1,421
$702
$320
$2,590
$2,208
$702
$320
$2,590
$2,208
$1,276
$1,404
$747
$7,770
$5,837
Operations
IT Service Level
$346
$144
$509
$19
$237
$509
$272
$237
$509
$272
$346
$618
$1,527
$561
Operations
IT Chargeback
684
$168
-$852
$684
$168
-$852
Operations
ITIL Training
$104
-$104
$52
-$52
$52
-$52
$104
$104
-$208
Operations
CSI Marketing and Communications
$243
$251
-$494
$362
-$362
$362
-$362
$243
$975
-$1,218
Applications
HCM Implementation
2678
-2678
$8,033
-$8,033
$10,711
$10,711
$10,711
$10,711
Applications
Pension
Applications
Budgeting
$1,310
-$1,310
$655
$655
$655
$655
$1,310
$1,310
Applications
Reporting and Analytics
Applications
Fixed Assets
$1,895
-$1,895
$10,738
-$10,738
$12,633
$12,633
$12,633
$12,633
Applications
Financials (Accounting 1/2 and T&E)
$612
-$612
$306
$306
$306
$306
$612
$612
Applications
GIS and Mapping
Applications
GRC
$1,800
-$1,800
$1,800
$1,800
$1,800
$1,800
Applications
CORE Contractor
$18,600
$18,600
Applications
EAFW
$4,056
$4,056
$4,056
$4,056
$8,112
$8,112
Telecomm
VoIP
$3,979
$2,136
-$1,842
$5,036
$4,840
-$195
$2,229
$6,972
$4,743
$11,244
$13,948
$2,705 State IT and Telecommunications Modernization—Phase 1—Assessment | 2-8
The State of Oklahoma | Capgemini Government Solutions
Area
Initiative
Year 1 ($000)
Year 2 ($000)
Year 3 ($000)
Total ($000)
Transform Costs
Operating/ Ongoing Costs
Cost Avoidance
Hard Savings
Net Savings
Transform Costs
Operating/ Ongoing Costs
Cost Avoidance
Hard Savings
Net Savings
Transform Costs
Operating/ Ongoing Costs
Cost Avoidance
Hard Savings
Net Savings
Transform Costs
Operating/ Ongoing Costs
Cost Avoidance
Hard Savings
Net Savings
Telecomm
MPLS
$4,500
$2,293
-$2,207
$3,000
$7,860
$4,860
$3,000
$11,609
$8,609
$10,500
$21,762
$11,262
Infrastructure
Data Center Consolidation
$5,118
$1,131
-$3,987
$1,144
$3,042
$1,898
$3,042
$3,042
$6,262
$7,215
$953
Infrastructure
Mainframe Consolidation
$300
-$300
$628
$1,013
$385
$250
$2,759
$2,509
$1,178
$3,771
$2,593
Infrastructure
E-Mail Consolidation/C ollaboration
$838
-$838
$3,847
$6,568
$2,720
$3,847
$6,568
$2,720
$8,532
$13,135
$4,603
Infrastructure Consolidation
Computer Optimization -Server
$1,120
$322
-$799
$2,062
$1,331
-$731
$1,480
$2,549
$1,069
$4,662
$4,201
-$461
Infrastructure
Workstation Optimization
$3,058
$2,406
-$652
$11,050
$21,574
$10,524
$8,497
$17,165
$8,668
$22,605
$41,144
$18,540
Infrastructure
Enterprise Storage
$1,465
-$1,465
$879
$879
$879
$879
$1,465
$1,757
$292
Infrastructure
Staffing
$8,097
$8,097
$8,097
$8,097
Governance
Implement IT Governance Program
$456
-$456
$38
-$38
$38
-$38
$456
$75
-$531
Governance
Operationalize IT Governance
$207
$564
-$771
$564
-$564
$564
-$564
$207
$1,693
-$1,900
Governance
Organizational Change
$114
-$114
$114
-$114
Governance
IT Governance Communications
$42
$78
-$120
$78
-$78
$78
-$78
$42
$234
-$276
Governance
Enterprise IT Architecture for Governance
$132
$71
-$203
$335
-$335
$335
-$335
$132
$742
-$874
Total
$34,433
$3,374
$107
$14,704
-$22,996
$48,446
$9,557
$5,337
$65,097
$12,431
$19,987
$10,409
$38,578
$78,410
$86,591
$102,866
$23,341
$62,622
$158,206
$94,620 The State of Oklahoma | Capgemini Government Solutions
Figure 2-3 provides a high-level overview of the implementation strategy and timing of the opportunities, ultimately leading to the future state for the State. The opportunities are organized by areas along the outer borders, opposite the final future State in the upper right. The opportunities are also identified by the year in which the opportunity should be initiated. Dotted lines indicate a dependency between opportunities.
Figure 2-3. High-Level Implementation Roadmap
Figure 2-4 provides a summary of the impacts as the State migrates from the current state of IT to the future state.
Figure 2-4. Summary of Impacts
Current State
Initiatives
Future State
30+ data centers and over 75 remote computing sites
Data center consolidation
Three data centers
4,000+ applications
Adoption of a shared services or common, enterprise-wide development application framework (platforms)
400 to 700 applications
129 e-mail/BlackBerry systems
E-mail consolidation/ collaboration
One e-mail system
No disaster recovery State-wide
Basic disaster recovery
State-wide disaster recovery
No IT governance
Basic governance model
State-wide IT governance model
Decentralized budgets
Use the People Soft Enterprise Performance Management module on zero based budgeting model for all IT budgeting
Centralized budget with cost accounting detail and performance measures
1,279 employees
Combined impact
909 employees
State IT and Telecommunications Modernization—Phase 1—Assessment | 2-9
State IT and Telecommunications Modernization—Phase 1—Assessment | 3-1
The State of Oklahoma | Capgemini Government Solutions
3 Approach and Current Situation
Capgemini performed a review and analysis of the State’s technology operations and costs, which led to the development of a comprehensive portfolio of improvement opportunities.
Capgemini’s analysis identified the number of State IT and telecommunications users and examined the majority of the State’s sites, systems, infrastructure, software, contracts, historical IT costs, methodologies, tools, network, security, and hardware. As part of this analysis, Capgemini uncovered aging systems/processes, service gaps, duplicated services and resource constraints.
3.1 Approach
A two-pronged, parallel approach was used to capture the necessary data elements required as part of the assessment. One approach was a manual survey process containing a series of questions designed around people, processes, and technology that captured the current state of IT used within each agency. These surveys were submitted to 108 agencies within the Executive Branch, as well as the State’s higher education institutions. The second approach included a combination of the manual survey and an automated data collection process. The State defined 18 large- and medium-sized agencies as candidates for automated data collection of the assets currently in use in support of each agency’s mission. These agencies are considered the Tier 1 agencies. The State agreed to utilize an agent-less, non-intrusive tool (BDNA Discover) to accurately collect information relating to an agency’s technology. Seventeen of these large- to medium-sized agencies participated in the BDNA scan.
While we achieved a respectable level of manual survey responses (weighted by agency IT spend and agency employee population) the manual survey responses have gaps or included inconsistent data.
Figure 3-1. Manual Survey Response Tracking
Agency Tracking (Without Higher Education)
Total number of agencies
108
Total number complete
74
Total number incomplete
34
Percentage complete
69 percent
A review of the manual survey responses indicated several agencies did not fully complete all sections of the survey’s five sections distributed to each agency.
Capgemini performed a review of the quality and completeness of the survey responses by agency. As part of this review, each response has an equal weighting of 1. The responses to the five surveys sections were factored into an overall score with a maximum raw value of 111 per agency. Each agency’s score is represented as a percentage of the maximum values, 100 percent being the maximum score State IT and Telecommunications Modernization—Phase 1—Assessment | 3-2
The State of Oklahoma | Capgemini Government Solutions
and 90 percent representing a target. For the Tier 1 agencies, the average score for all agencies who responded was 80.60 percent. Figure 3-2 provides the scores for all Tier 1 agencies.
Figure 3-2. Survey Tracker—Qualitative Statistics—Tier 1
Tier 1
Roll-Up Score
Agency
Agency GL ID Number
Score
1
Office of Juvenile Affairs
400
99.1 percent
2
Department of Human Services
830
99.1 percent
3
Office of State Finance
90
97.3 percent
4
Department of Central Services
580
96.4 percent
5
Department of Corrections
131
94.6 percent
6
Regents for Higher Education
605
87.4 percent
7
Department of Veterans Affairs
650
86.5 percent
8
Department of Agriculture
40
85.6 percent
9
Oklahoma Tax Commission
695
84.7 percent
10
Oklahoma Public Employees Ret. System
515
82.9 percent
11
Department of Transportation
345
81.1 percent
12
Department of Environmental Quality
292
79.3 percent
13
Corporation Commission
185
62.2 percent
14
Employment Security Commission
290
61.3 percent
15
Department of Rehabilitation Services
805
61.3 percent
16
State Department of Health
340
60.4 percent
17
Department of Public Safety
585
51.4 percent
18
Mental Health and Substance Abuse Services
452
50.5 percent
In addition to the BDNA scans and surveys, additional information was provided to assist in the validation of the automated and manual survey results.
The Office of State Finance has provided the Capgemini team with various budgetary and planning reports as a means of correlating the data captured with high-level agency plans submitted on an annual basis. This included the IT and telecommunications plans for the FY2009 through FY2011 period. This information provided information on planned IT operating expenses and project costs for each of these fiscal years. These plans also provide limited information regarding the personnel costs associated with IT for FY2011. In addition, the Capgemini team was provided with actual IT expenditure information for FY2009 through FY2010.
The Capgemini team was also provided reports previously conducted for specific agencies or initiatives. This included the Oracle Insight report with a review of the PeopleSoft (CORE) application and post-production and operational support processes and capabilities.
The Office of State Finance also provided information on the services currently provided by its agency to other agencies throughout the State. The State of Oklahoma | Capgemini Government Solutions
3.2 Current IT Environment
The combination of the automated and manual data collection processes as well as the additional information has provided a snapshot in time of the current state of IT in use by the State.
A key finding is that large- and mid-sized agencies (approximately 60 in total) manage their IT functions as an independent department within the agency, with either a CIO or IT Director. This decentralized IT management gives the agency and its IT leadership full authority to make IT decisions that are in its best interest. While this approach to IT management may result in a more responsive delivery of IT services to an organization, it generally often comes at great expense as IT fails to optimize resources across the enterprise. This decentralized governance model often results in a proliferation of applications and infrastructure technologies. This leads to a number of inefficiencies, including:
•
The inability to leverage buying power across the enterprise.
•
The over-provision of IT infrastructure resources as each agency
incorporates its surge capacity into its design resulting in hardware
operating at a fraction of capacity.
•
Expensive integration requirements to share data across agencies.
•
Additional information assurance risks due to a lack of industrialized processes including, backup, fault tolerance, and disaster recovery.
•
Redundant human capital necessary to support the local infrastructure and applications.
In many cases, the IT leaders are making decisions around the level of IT infrastructure investments required to support the short-term and long-term needs of their agency. This has led to over provisioning of IT capacity, since it is more cost-effective to acquire additional capacity and grow into it at the start of a major initiative, rather than add capacity once demand increases. This typically leads to assets being underutilized, waiting for the growth to occur over time. Imagine this over provisioning taking place 60 times, since the majority of the agencies have independent IT organizations with the authority to make these decisions. Based on this, the following finding was not a surprise:
In the survey responses, the agencies indicated that they had 1,799 full-time equivalents engaged in IT activities, but per the full-time equivalency plan of 2011, the agencies should be at 1,279 full-time equivalents. The significance is that there may be even more full-time unaccounted equivalents involved in IT. We do believe the number of IT personnel within the agencies may be closer to 1,279 since some agencies have notified the team that they entered the information incorrectly
State IT and Telecommunications Modernization—Phase 1—Assessment | 3-3
The State of Oklahoma | Capgemini Government Solutions
Given the current model, agency IT directors are tasked with providing the best service and optimizing IT expenditures and processes for their individual agency. By optimizing at the agency level, the State as a whole is not optimized from an IT perspective.
Capgemini found a number of disparate architectures, numerous technology vendors, and literally thousands of software products throughout the State. The loss of support synergies, purchasing economies of scale, and cross agency integration difficulties are driving the cost of IT higher at the aggregated State level.
The State of Connecticut embarked on a shared services initiative for its finance and administrative applications beginning in 2005. While the State of Connecticut has fewer agencies, the model is a good example of a successfully executed transformation to shared services and cost savings, and is representative of the recommendations that have been made in this assessment to the State. Other similar models are States of Colorado and Ohio. In each case, these states are further along the shared services path than Oklahoma by three to four years.
We would not recommend the voluntary model the State of Ohio has adopted for shared services; it is problematic at both the governance level and for realizing cost savings. From a State-wide perspective, this type of governance model would be equivalent to the voluntary adoption basis of the State’s CORE services—in other words, no effective governance. Once the door is opened for participation exceptions to shared services and consolidations, the cost savings of consolidation have been effectively negated. With over 40 years of a highly decentralization mindset in the State regarding IT, it is going to require a severe course correction to enable the successful adoption of a shared services model. There is no easy solution to this problem. In these types of environments, a quick transfer of the budgets, personnel, and authority is the most painless way to accomplish a successful move to shared services and consolidations.
3.2.1 Current State Analysis—Operations
The current situation relative to State operations can be characterized by the following elements based on the survey data received:
•
Limited operational shared services in use throughout the State.
•
Low process maturity in key service operation, transition, and design processes leading to execution inefficiencies. The Office of State Finance and the Department of Human Services did report the highest process maturity rankings in the core IT service processes.
•
A variety of IT service management tools are currently in use by various agencies.
•
Limited end user self-service portals are available, limiting the State’s ability to speed end user service and reduce service desk calls.
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•
Inconsistent IT asset management process maturity is leading to excessive costs.
•
Customer relationship management (CRM) software has been retrofitted to provide service desk functions while a leading practice software toolset is available for State usage from an enterprise contract with DHS.
•
System and application monitoring is very immature and leads to a lack of performance data and delayed service disruption resolution.
•
To support service desk operations across the State, 16 different software packages and processes are used.
3.2.2 Current State Analysis—Applications
CORE is the primary financial system and is considered the system of record for the State. CORE is maintained and operated by the Office of State Finance. There have been several studies since 2008 by the Hackett group and Pew Center on state organizations, and most recently, the completed Oracle Insight (CORE) PeopleSoft evaluation of December 2010 on the applications in use in the State.
The State’s implementation of PeopleSoft is a shared services model for financial, human capital, and administrative processes. Its deployment and utilization are ineffective because of the lack of authority to require adoption by the State agencies. This effectively negates the benefits and adoption of optimal process capabilities which resulted in the following observations from Oracle during their independent analysis on current process adoption and maturity:
•
The Oracle Insight evaluation paints a rather grim picture of suboptimal application usage/deployment for the CORE PeopleSoft financials and human capital management, which is consistent with the application survey findings. The use of business intelligence and analytics were themes they stressed in particular, with a great urgency to be deployed by CORE.
•
The Oracle Insight team also noted the State was lagging on the upgrade path for both financial and human capital management.
•
Interestingly, the Oracle Insight Team did not address governance, risk, and control (GRC), a fairly recent emerging requirement that should be included in any future upgrades and enhancement work with PeopleSoft. It is noted in the future projects that there is a GRC project planned by the State.
•
The Hackett group, Pew Center on States, and Oracle Insight reports has evaluated CORE and each of the reports shares one or more of these themes: under utilization; lack of return on investment; lack of best practices in finance and administration; redundancy; accessibility issues; and the need to extend shared services to more agencies.
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•
The more application silos, the more human capital required to maintain them. This was apparent from the staffing ratios and the large amount of consulting support required by the agencies to maintain their respective application portfolios. For example, the State agencies’ spending on consulting related to applications is estimated at $13 million for FY2009, $26.3 million for FY2010 and projected at $31 million for FY2011. This represents year over year increases of 50 percent and 18 percent. The State of Connecticut Department of Information Technology experienced a 33 percent drop in consulting spending by $11 million dollars within four years with their implementation of shared services and consolidation initiatives (see http://www.ct.gov/doit/lib/doit/4d-11_fy_2010_final.pdf).
•
In line with the Governor���s State of State Message in February 2011, the recommendation for electronic payments and P-Cards represents examples of shared services and processes that are needed in the financial and accounting areas; a savings of $3.6 million on the electronic payments was noted vs. a paper check.
•
Consistent with the National Association of State Chief Information Officers (NASCIO) Top 10 Priority Strategies in FY2010, the State is already actively engaged in five at different stages of maturity to address these current baseline deficiencies:
-
Budget and cost control, including managing budget reduction, strategies for savings, reducing or avoiding costs, activity based costing.
-
Consolidation and centralizing, including consolidating services, operations, resources, infrastructure, and data centers.
-
Shared services, including business models, sharing resources, services, and infrastructure, independent of organizational structure.
-
Transparency, including open government, performance measures and data, accountability, access to government data.
-
Governance, including improving IT governance and data governance.
•
The Oracle Insight CORE recommendations are consistent with the Capgemini view and the NASCIO priority recommendations and support the State’s direction to shared services and consolidation. We would encourage their adoption as part of the improvement process to the baseline applications used by CORE. As noted in the Oracle Insight document of December 2010, nine initiatives are listed in Figure 3-3.
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Figure 3-3. Oracle Insight Initiatives
•
While the current state of the State’s application portfolio with its many silos is not optimal, it should be noted that the waters were tested towards governance and standardization. It was difficult to get consensus. In effect, the agencies and the Office of State Finance did what they needed to do to meet finance and administration requirements in the State’s decentralized IT model. The lack of State-wide governance and a State CIO function further exacerbated this problem. Examples of this non-standardization include (but is not limited to these items):
-
55 agencies were identified by the Office of State Finance through the business process analysis (BPA) exercise in December 2010 that would benefit from PeopleSoft projects/grants GPC module, 11 agencies accepted the invitation to participate in CORE.
-
40 agencies were indentified during the BPA that would benefit from the PeopleSoft strategic sourcing capabilities.
-
86 agencies may benefit from the PeopleSoft accounts receivable (AR) and/or business intelligence modules, particularly licensing agencies. Observation on AR: These numbers illustrate that if the agencies are not participating in CORE, they must have something they are using to manage these AR activities, or worse, they are all manual processes. If half of the 86 agencies do not participate in the Accounts Receivables module and maintain some kind of system, then there is an interface requirement being maintained for 43 agencies. If the other half is using manual processes, the State has staff engaged in the paper chase, with the lowest productivity and highest cost per AR transaction. State IT and Telecommunications Modernization—Phase 1—Assessment | 3-7
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-
18 agencies would benefit from the use of the fixed asset (inventory) module and are noted in the CAFR (comprehensive audited financial report) with inventory valuation. It was noted in the assessment that multiple fixed assets systems exist in the State.
•
Oracle’s Insight recommendations of November 2010 to the State found similar or the same findings.
3.2.3 Current State Analysis—Telecommunications and Network
The current state of networks and telecommunications infrastructure in the State can be characterized by the following elements, based on the automated scans and survey data received:
•
A mixed set of vendors and vendor models of equipment is in use for common functions like switching and routing. The survey results and the BDNA scans indicate switching and routing from Cisco, Juniper, Extreme, 3COM, Dell and Netgear. The same was observed for wireless equipment vendors. This results in excessive support personnel requirements and limited purchasing strategies for the State.
•
The lifecycle of equipment deployed is in various stages of support are at end of life. BDNA scans show multiple versions of OS/Firmware on network equipment, a potential security concern. We also observed platforms from Cisco and 3COM that are no longer supported by vendors. A multitude of vendors also make the task of lifecycle management difficult.
•
We observed an inconsistency of tools for network performance and monitoring. No State-wide set of metrics exists to measure and compare network performance. The tool sets used for monitoring were also fragmented and ranged from basic tools like Solarwinds to Nagios.
•
There is no State-wide network compliance model for network and telecom. This makes auditing for security compliance and monitoring very difficult.
•
There are competing wide-area network (WAN) architectures in place throughout State agencies. The Office of State Finance, Department of Human Services, Department of Corrections, OneNet, and others maintain WANs that provide the same services to themselves and/or other State entities.
•
The State owns a significant fiber plant throughout the capital complex and other major population centers in the State. However, pockets of responsibility and ownership exist (the Department of Transportation, OneNet, third party administrator, and the Office of State Finance) throughout the State for the laid fiber, with no single owner and/or authority in place today for State-owned fiber. This enables additional purchases of capacity and creates an inefficient use of State-owned capacity.
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•
We also noticed that several agencies manage their own WAN and deploy point-to-point (P2P) circuits to remote locations from central offices. Many locations with multi-agency presence have duplicate circuits and local area network (LAN) environments, which results in unnecessary costs that can be eliminated by consolidating and sharing such assets. Several State agencies including the Department of Human Services, Department of Corrections, and Office of State Finance maintain their own private branch exchanges and voice circuits. Telephony is a good example of a shared service used by a limited number of agencies today that should be expanded State-wide.
•
The Office of State Finance currently has a central shared service that is being used by several agencies resulting in consolidation or elimination of several LAN segments. The use of these shared services is mostly by small and medium size agencies. In some cases, agencies that are opting for the shared services still maintain their own infrastructure. The shared services model is not being leveraged by large agencies.
•
As far as we have been able to ascertain, the State of Oklahoma is the only State that has not consolidated it’s WAN to a single network and maintains multiple networks between State agencies. Most States led consolidation initiatives in the 1980s and the 1990s. The initial cost for the networks, along with ongoing maintenance, represents a lost opportunity for a consolidated network and the associated savings. It is estimated at a minimum of $3 to $6 million to as much as $15 million is spent annually by different agencies to maintain their own networks.
•
The current State network initiative is more about replacing obsolete networks and standardizing on a single network with current technology. Typically, agencies like the Department of Corrections and the Department of Public Safety will object to consolidation on the basis of security. Great advances have been made in the segmentation of networks for security and other purposes, and such security concerns are far less relevant.
Several recent initiatives spearheaded by the Office of State Finance, such as Voice over Internet Protocol (Voice over IP, VoIP) migration is a step in the right direction for consolidating the State’s network and telecommunications infrastructure to address some of the references made above.
3.2.4 Current State Analysis—Infrastructure
The State’s current infrastructure is a reflection of several years spent building and operating IT environments and making IT decisions at the agency level. Consequently, we observed varying levels of sophistication and maturity across the enterprise.
Based on information collected through surveys and discovered with BDNA, we observed the following themes in the current environment:
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1.
Disparate technologies exist within and across agencies as evident by the following facts:
•
Multiple vendors and technology platforms are supporting core data processing activities. For example, 14 storage providers, 10 server manufacturers, and 15 printer manufacturers were identified. This results in excessive support cost and limited purchasing power.
•
While there are State-wide contracts with specific workstation vendors, many agencies still own and maintain workstations from other non-contract vendors, adding to the complexity and cost of end user management.
•
Most major agencies maintain their own anti-virus platforms, with varying degrees of proficiency. 8 different versions of McAfee were identified in the BDNA scans.
•
Multiple database technologies exist, including approximately 30 different versions of SQL and Oracle.
2.
We found no cohesive technology lifecycle management (TLM) process or strategy in use across the technology landscape, as evident by the following facts:
•
Lack of tools to consistently manage software upgrade cycles:
-
More than 25 workstation operating systems.
-
14 different versions of Microsoft Office.
-
More than 18,000 Windows XP Nodes, data capture also revealed instances of Windows 95.
-
34 NT devices.
-
1,340 Windows 2003 devices discovered.
•
Lack of lifecycle management tools:
-
706 workstations purchased in FY1999 or earlier.
-
More than 6,661 personal computers out of warranty coverage (23 percent of total workstations).
-
50 percent of databases are no longer under vendor’s support.
-
92 percent of current SQL Server databases no longer under support as of April 12th, 2011.
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3.
There was limited development of a central governance model or standard for the technology architecture. Responsibility for this currently lies within agency, as evident by the following facts:
•
No State-wide adoption of a uniform hardware platform as evident by statistics above.
•
Limited State-wide support contracts for infrastructure devices.
•
No unified technology portfolio management capability or structure exists across the State for software distribution, patch management, and standards enforcement.
4.
Although some agencies offer shared IT services, we observed limited shared services adoption from larger State agencies. This has led to wide-scale duplication of core services, as evident by the following facts:
•
Commodity IT, such as e-mail, antivirus, back-up, file and print, collaboration, domain and directory services, database management, and server management and administration functions are operated and maintained individually by agencies. There are 129 e-mail or BlackBerry servers in use across the State.
•
Use of service-level agreements and performance metrics is not institutionalized.
The survey results indicate a very large portion of State IT assets fall outside of the manufacturer’s warranty or maintenance support period. The lack of standardized technologies contributes to higher costs and requires additional staffing with specialized skill sets. Outdated technology devices are prone to a higher failure rate, longer recovery times, potential constraints on security, and increase the difficulty to deploy additional application functionality, resulting in higher operating costs and diminished end user productivity.
The survey results indicate there are 30 data centers, computer rooms, and computer closets running mission critical applications in the Executive Branch of the State. The survey data indicated many mission critical business applications require around the clock support (24 hours X 7 days per week X 365 days per year). Those applications that are perceived as mission critical should be part of a disaster recovery plan that focuses on the resumption of normal business operations in the event of a disaster or major business interruption. It was reported only the largest agencies (OSF and DHS) have an appropriate process maturity level for some core IT processes, disaster recovery planning and disaster recovery capabilities, while many of the smaller agencies indicated a level of disaster response process maturity that is unacceptable. This may result in longer system outages, more costly recovery processes, and potential loss of services to the constituents of the State.
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State IT and Telecommunications Modernization—Phase 1—Assessment | 3-12
Figure 3-4 describes the current-state findings, high-level recommendations, and the primary benefits behind each recommendation.
Figure 3-4. Summary Infrastructure Current State
Current State Findings
High-Level Recommendations
Primary Benefits
Disparate technology
•Standardize on technology models, products, versions. •Retire outdated systems. •Manage decisions and compliance moving forward.
• Streamlined portfolio. • Cost reduction. • Aligned support staff. • Increased management capabilities.
No centralized TLM strategy
•Develop and publish a TLM strategy, with acceptable guidelines, standards and an appropriate execution strategy.
•Improved cyclical spend decisions. •Reduced risk, support and testing needs. •Eliminated end of life or support agreements with expensive maintenance contracts.
Limited governance and standardization
•Standardize decision criteria, thresholds, reporting and metrics. •Define model and process for governance and standardization.
•Transparency—the State can’t manage what it can’t measure.
Limited shared services
• Continue Office of State Finance initiatives around shared services, shared infrastructure and State­wide
governance. •Standardize on common core services and provide them centrally across the State.
•Significant cost reductions by removing duplicated services and administration. •Gained centralized management capabilities. •Determined shared model support required for overall technical administration and management. The State of Oklahoma | Capgemini Government Solutions
3.3 Financial Observations
In addition to the IT-specific areas, findings related to IT spending from a financial standpoint should also be highlighted.
IT and telecommunications expenses for State agencies are recorded in two major categories:
•
Salaries and benefits.
•
Hardware, software, consulting and other.
State agencies, when recording salary and benefit costs, do not identify the employees specifically assigned to IT and telecommunications activities. Therefore, it is not possible to determine the IT and telecommunications expenditures for salary and benefits.
The actual costs presented in this financial baseline were obtained from the Office of State Finance. Our analysis of the various materials provided indicates the estimated IT staff headcount, salary and benefits costs by branch, as depicted in Figure 3-5.
Figure 3-5. 2009 Actual Expenditures and 2011 Headcounts and Costs
Branch
2009 Actual IT Expenditures (excluding personnel costs)
2011 Planned IT Headcount
2011 Planned IT Personnel Costs
Average Salary per IT Headcount
Executive
$220,538,502
1,279
$97,512,743
~$78,000
Judicial
$5,319,991
N/A
N/A
N/A
Legislative
$1,402,260
N/A
N/A
N/A
Higher Education
$139,161,404
1,036
$62,784,782
~$60,600
Total
$366,422,157
2,315
$160,297,525
~$70,125 (Blended)
*Please note that the Judicial and Legislative branches do not submit plans to the Office of State Finance for their annual IT and telecommunications plans.
As part of our financial assessment, we conducted an analysis comparing the FY2009 and FY2010 IT planned budgets for hardware, software and consultants and compared them to the actual expenditures for the corresponding period. The results of this analysis indicated the amounts budgeted to be in excess of the amounts spent by a sizable percentage. One can draw the conclusion that monies budgeted and allocated for IT modernization initiatives are not being spent, but may be directed elsewhere to fund the operation and administration of non-IT agency functions. It is also understood the plans may include funds for projects dependent on grants that are not received; and as a result, the planned projects are not initiated. Nevertheless, opportunities no doubt exist for improvements in the accuracy of IT budgeting estimates through consolidation.
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Figure 3-6 depicts the planned budget to actual expenditures comparisons for FY2009 and FY2010.
Figure 3-6. Budget to Actual Comparison FY2009 and FY2010
Branch
FY2009 IT Planned Expenditures (excluding payroll)
FY2009 IT Actual Expenditures (excluding payroll)
Difference
Executive
$404,513,005
$220,538,502
$183,974,503
Higher Education
$184,321,339
$139,161,404 $45,159,935
Total
$588,834,344
$359,699,906
$229,134,438
Branch
FY2010 IT Planned Expenditures (excluding payroll)
FY2010 IT Actual Expenditures (excluding payroll)
Difference
Executive
$394,323,708
$210,749,752
$183,573,956
Higher Education
$131,182,348
$134,762,649
-$3,580,301
Total
$525,506,056
$345,512,401
$179,993,655
IT Actual Expenditures vs. IT Telecommunications Plans
The State has spent less than planned for IT services by an average of $200 million each of these years.
Figure 3-7 highlights agencies that had largest percentage of the under spend on IT during FY2009. Appendix F— Supporting Financial Data includes a comparison for each agency for FY2009.
Figure 3-7. Comparison of Planned vs. Actual Expenditures FY2009
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3.4 Human Capital/Operations
As noted in the Section 3.3—Financial Observations, IT personnel costs are not recorded specifically by agency IT, but to the individual agencies as a whole. In addition, there is not an overall breakdown of the skills and competencies within the IT personnel group for the State as a whole. As part of the manual survey process, an attempt was made to understand the skills and competencies of the IT staff within the individual agencies. From the survey responses, it is clear there is not a source available to identify the IT skills and competencies available to the State of Oklahoma. This no doubt results in under utilization as well as over sourcing.
As the State progresses to its desired future state, it will be very important to build and understand the true skills and competencies of the IT staff of the State as a whole. It is recommended the development of a skills database structured around a survey on State-wide IT personnel be implemented and maintained.
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4 Portfolio of Improvements
The portfolio of improvements identified by Capgemini is designed to deliver long-term reductions in the total cost of ownership for IT services delivered State-wide. This transformation is rooted in the deployment of standardized processes to improve the quality of services provided to agencies while providing a feedback loop for continuous process improvement.
To achieve the quickest and greatest IT and telecommunications cost savings throughout the State, the CIO study has identified two strategic objectives: productivity and quality.
These two strategic objectives will help the State eliminate redundant, overlapping, and inefficient processes and yield an overall sustainable cost savings exceeding the target, depending on how aggressively the State wants to develop and implement these strategies. These initiatives will mitigate the current risk that we observed within the State by developing a high-availability IT and telecommunications infrastructure and service delivery model.
The collective impact of the initiatives identified by the CIO study is linked to these strategic objectives and is in direct support of HB1170. Once these initiatives are implemented, they will deliver long-term reductions in the total cost of ownership for IT services offered State-wide. More specifically, these initiatives are designed to reduce the acquisition costs for IT technology and services, reduce the on-going operating costs associated with providing IT services to State agencies, and provide for the elimination of duplication or overlapping services. This transformation is deeply rooted in the deployment of standardized processes that will improve the quality of services provided to agencies. These processes provide a feedback loop for continuous process improvement, which keeps costs low and quality high.
4.1 Leading Practices
The strategic objectives of productivity and quality can be accomplished by leveraging three basic leading practices: centralization, platform consolidation, and standardization.
Centralization
Centralization and consolidation are the processes of shifting technologies and services from many disparate instances and locations into a single technology or location. It often includes consolidating from many physical devices and applications to a few. Capgemini recommends that all infrastructure management services be centrally located and centrally managed by the ISD organization. This strategy is to move or consolidate these hardware platforms and associated support services from the individual agency data centers, server rooms, or closets to the new green data center located in the Office of State Finance building. The new data center is energy efficient, secure, and well-positioned for automation of
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routine support services designed to significantly reduce the operational costs while improving the quality of services to the agencies. Centralization also makes it easier to create an effective disaster recovery strategy while minimizing labor and technology redundancies.
Platform Consolidation
The term platform is meant to collectively reflect mainframe computers and server type computers that may run Windows, UNIX, AIX, Linux, and other operating systems. Platform consolidation is an approach to the efficient use of computer resources in order to reduce the total number of platform devices or locations that an organization requires. The practice developed in response to the problem of platform sprawl, a situation in which multiple, under-utilized servers take up more space and consume more resources than can be justified by their workload.
The traditional approach to building-out the infrastructure platform for a data center was to dedicate one server to one application. This model requires the over-provisioning of processing, memory, storage, and other peripherals. The rapid evolution of the business environment and continuing advancement of technology has created an opportunity to replace this static definition of a data center and generate a new, more efficient, virtual operating environment.
Application servers are sized for a specific application, with the selection of the central processing unit, memory, storage, and input/output capabilities based on the projected peak needs of that one application. The utilization of all of these components is often well below the maximum since few applications run at their peak load all of the time. This over-provisioning wastes significant resources.
Standardization
Put at its simplest, a standard is an agreed upon, repeatable criterion for execution. It is a published document that contains a set of technical specifications or other precise criteria designed to be used consistently as a rule, guideline, or definition. Productivity gains and cost reductions can be achieved by standardizing across technologies (e.g., platforms, applications, etc.), data standards, processes, procurement, and vendors. Standards help organizations reduce the complexity within their operations. This can lead to higher efficiency because such standards can result in timesaving and enable reuse while allowing for reduction in replications and/or support staff.
Apart from these efficiency aspects, there are the effectiveness gains. Standardization can enable future changes with greater flexibility to support new functions, new technologies, and improve the scalability of existing functions. Standards can result in a lower acquisition and support costs while creating greater economies of scale. Standardization can also lower costs of integration because components are built on a common set of specifications that have demonstrated interoperability. In addition, standards can improve quality, reduce testing, and reduce user training when products change.
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4.2 Key Improvement Opportunities
Based on review of the current situation in the State, areas of improvement have been identified in four key areas: operations, applications, telecommunications, (networks), and infrastructure. These opportunities make up an overall portfolio of improvements. Detailed information on each of these areas can be found in Appendices A through D.
4.2.1 Operations
The ISD is in the process of implementing a few key processes to improve overall IT service delivery. The following information expands this direction across more processes required to sustain a leading practice shared services delivery organization.
The system management framework for IT service delivery illustrated in Figure 4-1 is based on the premise that the flow through the Information Technology Infrastructure Library (ITIL®) framework must be driven by business requirements and deliver measurable business benefits. The future vision for State operations is based on designing and implementing a standard set of processes based on the ITIL® v3, a globally recognized standard for IT service delivery.
Figure 4-1. Systems Management Framework
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This suite of integrated processes is designed to improve the quality and repeatability of service delivery while reducing cost.The proposed implementation approach utilizes ITIL Lite, which builds on the implementation of processes that are closely aligned to State objectives for cost effective and efficient services and allows for continuous improvement. ITIL Lite is a phased implementation of the core ITIL processes needed to immediately improve service delivery to meet defined objectives. The selected processes are usually a sub set of the complete ITIL framework.
These selected processes must be integrated to deliver maximum benefit and reduce operating costs. Figure 4-1 assumes usage of a leading practice software product that is available to the State through a Department of Human Services enterprise license. This tool is already in operation and can speed the implementation and maturity of a number of core processes. Some of the improvements made possible by these in processes and tool sets are:
•
Designation of the key service(s) where the business impact of major incidents is critical and fast recovery is essential.
•
Prioritization of end-to-end service-level agreements from a business perspective to ensure service delivery and accountability.
•
Implementation of end user self services to speed end user response and reduce impact on service desk services. This combined with a service catalog and service request process significantly reduces IT service delivery costs. Some agencies have implemented aspects of this concept.
•
System performance, monitoring service level agreements, and capacity planning will enable the shared service organization to expand its capabilities to meet agency service expectations and improve communications.
•
Focus on driving down defects and improving services without significant investment.
Figure 4-2 summarizes costs and benefits analysis for key operations-related opportunities/initiatives.
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Figure 4-2. IT Operations Estimated Investment and Cost Savings
Area
Initiative
Year 1 ($000)
Year 2 ($000)
Year 3 ($000)
Total ($000)
Transform Costs
Operating/ Ongoing Costs
Cost Avoidance
Hard Savings
Net Savings
Transform Costs
Operating/ Ongoing Costs
Cost Avoidance
Hard Savings
Net Savings
Transform Costs
Operating/ Ongoing Costs
Cost Avoidance
Hard Savings
Net Savings
Transform Costs
Operating/ Ongoing Costs
Cost Avoidance
Hard Savings
Net Savings
Operations
Asset Management
$1,225
$780
$178
-$1,827
$2,439
$5,203
$2,764
$2,751
$13,963
$11,212
$1,225
$5,970
$19,344
$12,149
Operations
Service Desk and Incident Management
$627
$706
$1,105
-$228
$2,876
$4,345
$1,469
$2,876
$4,345
$1,469
$627
$6,458
$9,795
$2,710
Operations
Problem Management Improvements
$462
$106
-$356
$324
$158
-$166
$324
$158
-$166
$462
$648
$422
-$688
Operations
Change Management
$248
$528
$637
-$139
$633
$2,187
$1,554
$633
$2,187
$1,554
$248
$1,794
$5,011
$2,968
Operations
Automated Event Monitoring and Control
$1,588
$252
$603
-$1,237
$724
$1,494
$770
$724
$1,494
$770
$1,588
$1,700
$3,591
$303
Operations
Availability Management
$490
$688
$198
$193
$1,375
$1,182
$193
$1,375
$1,182
$490
$386
$3,438
$2,562
Operations
Capacity Management
$1,108
$129
-$979
$372
$246
-$126
$1,108
$372
$375
-$1,105
Operations
Service Request Catalog
$1,276
$107
$2,590
$1,421
$702
320
$2,590
$2,208
$702
$320
$2,590
$2,208
$1,276
$1,404
$747
$7,770
$5,837
Operations
IT Service Level
$346
$144
$509
$19
$237
$509
$272
$237
$509
$272
$346
$618
$1,527
$561
Operations
IT Chargeback
684
$168
-$852
$684
$168
-$852
Operations
ITIL Training
$104
-$104
$52
-$52
$52
-$52
$104
$104
-$208
Operations
CSI Marketing and Communications
$243
$251
-$494
$362
-$362
$362
-$362
$243
$975
-$1,218
Total
$6,609
$2,661
$107
$6,416
-$2,747
$1,108
$8,542
$320
$17,990
$8,660
$684
$9,394
$320
$26,867
$17,109
$8,401
$20,597
$747
$51,273
$23,019 The State of Oklahoma | Capgemini Government Solutions
4.2.1.1 Operations Initiatives
Key operations area initiatives are defined as:
•
IT asset management centralization.
Centralize all IT asset management in the State with one process and tool set that can be leveraged throughout all agencies.
•
IT service desk consolidation and incident improvements.
Consolidate State IT service desks using a single tool suite to support incident management improvements, integration with alert monitoring, single alarm paging, and enable virtual service desks where desired/required.
•
Problem management improvements.
Problem management minimizes the impact of incidents and maximizes communications and teaming effectiveness to restore services and eliminate the root causes.
•
Change management improvements.
Consolidate change management into one consistent process and establish a change approval mechanism to communicate system changes and risk across the supporting services.
•
Automated event monitoring and control.
Develop a tiered monitoring architecture to support the system requirements, service-level agreements, and performance of shared services across the State.
•
Availability management.
Develop and implement a process to monitor critical business services availability to ensure service levels are met and variances are reported and resolved through the use of incident and problem management.
•
IT service levels.
Aligns business expectations with the capability of IT services delivery to monitor and deliver according to agency business expectations.
•
Service request and service catalog management.
Automate the available standardized services provided by State IT services that can be ordered, approved, tracked and monitored to effectively and efficiently deliver IT services.
•
ITIL training.
ITIL training will rally IT resources around a common glossary of terms and definitions that enable people across the agencies to speak the same language and use consistent centralized and consolidated processes to deliver consistent, high quality IT services.
•
Continuous service improvement, marketing, and IT communications.
Since IT will be run like a business, continuous service improvement needs to be managed and aligned with holistic State IT needs in harmony with agency requirements. A marketing and communications function will help establish effective communications mechanisms for relationship managers and agency leaders throughout the State.
State IT and Telecommunications Modernization—Phase 1—Assessment | 4-6
The State of Oklahoma | Capgemini Government Solutions
Other initiatives suggested for Year 3 are:
•
IT capacity planning implementation.
Effective utilization of available resources is critical to optimize the State’s IT investments. With capacity planning and management, the State will have the capability to monitor and plan service capacity.
•
IT chargeback and IT cost allocation.
Shared service cost transparency is critical to enable State agencies to budget for IT services and understand the cost of various levels of service.
IT Asset Management Centralization
Overview
IT asset management is a critical process to control and manage IT assets and enable other IT support process with valid inventory information to increase the effectiveness and efficiency of IT delivery.
Recommendation Summary
IT asset management process and tools need to be standardized and centralize across the State agencies to optimize the resource and capacity management capabilities and to insure that proper control and oversight occurs on all IT assets. Standard use of bar codes and automated inventory agents to monitor and record all changes to asset attached to the State network is recommended.
Recommendation Benefits
IT information sources, consulting companies, and vendors all indicate that IT asset management can generate savings on assets from 20 to 50 percent. This includes items such as:
•
Provides for full life cycle management of IT assets.
•
Software licensing audit compliance optimizes software investments through reallocation (Gartner 20 to 25 percent become shelfware).
•
Supports consolidation of vendor contracts.
•
Reduces support costs through optimizing refreshes and reuse of new equipment.
•
Assist with justifying software and hardware investment.
•
Allow audits for disappearing assets.
•
Stops overbuying and unauthorized usage.
•
Reduces support costs through optimizing refreshes and reuse of new equipment.
•
Volume licensing agreement and management.
•
Tracks asset life cycle changes.
•
Tracks cost and control asset data.
State IT and Telecommunications Modernization—Phase 1—Assessment | 4-7
State IT and Telecommunications Modernization—Phase 1—Assessment | 4-8
The State of Oklahoma | Capgemini Government Solutions
•
Supports incident, service desk, service request, and change processes with enabling information.
•
Key enabler for configuration management process and database.
•
Provides key data for IT chargeback and TCO application.
•
Portfolio management process input enabler to enable optimization of this portfolio.
•
Enable data to support maintenance analysis for potential cost savings.
The key areas for the initial process scope are servers, desktops, network, storage, and software.
Implementation Plan
The implementation plan is a standard ITIL process plan with focused usage of a fully developed process model, even if the entire model is not implemented to enable full understanding of its components and integration. An IT asset management core group needs to be responsible with delegated duties to other IT service support staff. The plan follows a plan, design, configure, test, train, and iterative rollout plan.
IT Service Desk Consolidation and Incident Improvements
Overview
IT service desk consolidation will consolidate resources and standardize the IT service desk function for all agencies. The service desk will support the incident, problem, and service request processes using the ITIL framework. Lead practice tool implementation is recommended using the enterprise license from Department of Human Services. After due diligence a determination on what service desk remain virtual can be made. DHS has software and process upgrade planned and budgeted; combining this effort to create a State-wide service is recommended. In addition improving the incident process will provide enhanced service improvements to end customers.
Recommendation Summary
Consolidate and standardize the service desk process and tool across the State agencies, reducing the current number of separate organizations, software, and processes.
Recommendation Benefits
Significant cost savings are attributed to FTE reductions, software license savings, and more effective and efficient usage of service desk resources, end user self help, and automated interface with monitoring tools. A service desk modeling tool was used to estimate the staffing requirements and was very conservatively calculated. State IT and Telecommunications Modernization—Phase 1—Assessment | 4-9
The State of Oklahoma | Capgemini Government Solutions
Implementation Plan
The implementation plan utilizes the standard ITIL process implementation approach to improve the incident and problem process. The service desk consolidation will be timed to parallel the data center consolidation of various agencies. Key activities of this implementation are listed below.
•
Plan and scope project phases consolidating other agency service desks (help desks).
•
Develop service desk improvements to scale the service for State-wide support.
•
Define software configuration, reporting, dashboard, and end user web access requirements enhancements.
•
Strengthen interface with incident, problem, and service request process requirements.
•
Interface with system monitoring tools for automated incident recording and assignment.
•
Develop and test software and process improvements.
•
Develop and train process users.
•
Rollout users (service desk level 2 support including applications).
•
Develop and distribute performance reports, dashboards, end user access.
•
Develop improvement plan focused on self help.
Problem Management Improvements
Overview
Problem management minimizes the impact of incidents and maximizes communications and teaming effectiveness to restore services and eliminate the root causes. The problem management team will:
•
Own the end to end management, lead enterprise wide Major Incident Response Teams (MIRT),Coordinate all major incident status communications
•
Co-host a daily enterprise wide operations meeting.
This initiative should be implemented with the incident and service desk improvements because of the tight process and tool integration. It also will take advantage of the leading practice tool suite from the Department of Human Services. The State of Oklahoma | Capgemini Government Solutions
Recommendation Summary
Sustaining application and infrastructure service delivery to an acceptable level and resolving repeating incidents to minimize the end user impact and IT service staff impact, problem management using ITIL framework leading practices provides this capability.
Recommendation Benefits
There are models that utilized detailed incident data and availability statistics to calculate the overall cost savings by minimize end user outages and impacts. In addition, mitigating the IT support staff efforts to constantly resolve repeating incidents generates resource savings. However, since this was a high level availability and State-wide incident analysis, minimal financial savings could be calculated.
Implementation Plan
The implementation plan follows the ITIL implementation project plan approach. In this situation the process has to be created and it is assumed that the vendor partner will supply the mature process detail that will only need to be slightly modified for the State. This new process requires a small focused staff. This project should be executed with the incident and service desk initiative.
•
Plan and scope project phase.
•
Define process improvements necessary to scale the process.
•
Define software configuration and reporting requirements.
•
Refine the process model and procedures.
•
Interface with incident, problem, change management, and service request process requirements.
•
Develop repeatable training materials.
•
Develop and procure test software.
•
Rollout.
•
Develop and distribute performance reports and publish on wiki.
Change Management Improvements
Overview
Change management is the coordination and controlling process for all changes to the State’s production environments. This process ensures that changes do not conflict, risk assessment is properly analyzed, security practices are met, and end user notification is sufficient to enable the end user community to plan around the change and expected outages. This also enables the State agency IT relationship managers to review and approve all changes impacting their users.
State IT and Telecommunications Modernization—Phase 1—Assessment | 4-10
The State of Oklahoma | Capgemini Government Solutions
Change management processes based on ITILv3 will be implemented using the leading practice software in use by the Department of Human Services as a base with active interfaces between incident, problem, and service request. The change management team will own the end-to-end management and execution of the process, ensure each change is executed and closed at approved times, ensure each change is constructed and tested to minimize risk, host enterprise-wide weekly change advisory boards, lead post-implementation reviews as needed, conduct root cause analysis reviews, and coordinate communication collateral needed to support the process.
Recommendation Summary
Sustaining a State environment of shared services requires a consistent, managed process to minimize the service disruption risk to the State’s end user population.
Recommendation Benefits
Change management provides oversight across the State’s IT services to minimize disruption, assess risk, and align multiple change schedules to mitigate conflicts. Since the study did not do a detailed change risk assessment, the calculated savings on ineffective changes could not be measured. However, analysis of the current full-time equivalent headcount associated with change management found the State was much higher than industry benchmarks indicating a savings during consolidation and standardization of the process.
Implementation Plan
This process would follow the ITIL framework leading practices and also utilize the leading practice tool from the Department of Human Services, which has an integrated change management module that allows cross-process information to be used to further the overall process execution effectiveness.
•
Plan and scope project phases.
•
Develop process requirements and tool improvement and integration requirements.
•
Develop software configuration and reporting requirements.
•
Interface with incident, problem, service request, and IT asset
management.
•
Configure and test software.
•
Develop a repeatable web/video training course.
•
Train users (includes project managers, service providers, developers, and IT management).
•
Rollout in parallel with the data center consolidation and server optimization (detailed in the infrastructure opportunities section of this document).
•
Develop and distribute performance reports and publish on a wiki.
•
Rollout to the remaining agencies.
State IT and Telecommunications Modernization—Phase 1—Assessment | 4-11
The State of Oklahoma | Capgemini Government Solutions
Automated Event Monitoring and Control
Overview
Automated event monitoring and control standardizes event and monitoring software and procedures to capture application and service alerts and notify incident management to activate the service response.
Recommendation Summary
Sustaining high quality operations of shared services requires exception based monitoring and response to reduce service delivery costs and optimizes response efforts and mitigates end user impacts.
Recommendation Benefits
Cost savings are attributed to full-time equivalent reductions, software license savings, more effective and efficient usage of support resources, and tiered monitoring.
Implementation Plan
•
Plan and scope project phases.
•
Develop ITIL event, monitoring and control process and procedures and tool requirements.
•
Select and procure monitoring tool set, if required and define tier
monitoring requirements.
•
Develop procedures for implementing monitors and alerts.
•
Interface with incident process.
•
Develop and test software.
•
Train monitoring team on software and procedures.
•
Rollout in parallel with the data center consolidation and server
optimization.
•
Develop and distribute monitoring log analysis reports.
•
Develop Phase 2 improvement plan for next set of infrastructure services.
Availability Management
Overview
Implement standardized availability monitoring for business and shared services that enables tracking, reporting, and supports the service level management process. Availability monitoring monitors and reports the mean time between failures and tracks the availability and utilization of business services and enables the accountability of services levels.
State IT and Telecommunications Modernization—Phase 1—Assessment | 4-12
The State of Oklahoma | Capgemini Government Solutions
Recommendation Summary
Availability is a core ITIL process to sustain the shared services environment and enable effective dialogue with the relationship managers, agency leadership, and IT service providers to meet end user expectations.
Recommendation Benefits
There is considerable cost avoidance through availability management by focusing on increasing service availability, aligning service expectations with architecture, and by minimizing maintenance service disruptions. Since business system outage data was not available, calculation of this cost avoidance was not possible.
Implementation Plan
Availability is an ITIL process and the project plan follows this process improvement approach. The critical element is to understand the needs of the information audience and the level of detail required.
•
Plan and scope the project.
•
Develop ITIL availability management process and procedures.
•
Integrate process with monitoring and control, incident, and service level management.
•
Design and develop availability reporting and web portal reporting
capacities.
•
Develop and test software and reports.
•
Automate data gathering and reporting.
•
Determine critical business services and implement with existing shared services. The implementation should then be included as part of the data center consolidation and server optimization involving production servers.
•
Implement availability management for all production services having a service level target defined.
Service Catalog and Service Request
Overview
Service request is already in operation in the Office of State Finance and some of the other larger agencies using different processes and software tools. This can be consolidated using the Department of Human Services leading practice tool to simplify the overall support and end user interface for service request. Service request requires a consolidated service catalog that the Office of State Finance has initiated but will have to be expanded as more services are introduced into the shared environment.
The proposed leading practice solution re-uses current State-owned software and scales to support the State’s IT users.
State IT and Telecommunications Modernization—Phase 1—Assessment | 4-13
The State of Oklahoma | Capgemini Government Solutions
Recommendation Summary
Consolidating the IT service request workflow and service catalog provides opportunities to optimize the work requests, delivery flow, and service automation across multiple agencies to maximize economies of scale in delivery and support these services and processes.
Recommendation Benefits
The solution triggers all the necessary automated processes and enables the service desk to monitor and ensure services meet communicated expectations. Self-service capabilities allow employees to track the status through online inquiry. Business benefits are significant and include higher employee productivity, service provider productivity, and effective coordination and expectation management.
The service desk model takes the service requests into consideration in the staffing model to meet acceptable service measures. This consolidation provides a full-time equivalent reduction across State agencies.
Implementation Plan
Service request and service catalog are integrated processes with the service desk but do provide separate services to the end users. The leading practice toolset also allows end users self-service and review status further reducing the service desk effort. This project plan should closely parallel the service desk and incident project.
•
Plan and scope project phases.
•
Develop service request and service catalog system requirements.
•
Develop workshops to review existing service requests and create service catalog items.
•
Define software configuration and reporting requirements.
•
Configure service request software and initiate service catalog definitions.
•
Test service requests and the catalog.
•
Develop and train process users.
•
Rollout in parallel with the data center consolidation and optimized
servers.
•
Develop and distribute performance reports and publish performance in the web portal.
•
Rollout to all agencies.
State IT and Telecommunications Modernization—Phase 1—Assessment | 4-14
The State of Oklahoma | Capgemini Government Solutions
Service Level Management
Overview
Service level management and reporting provides the process and enabling tools to establish, monitor, and improve business-aligned IT service quality through a constant cycle. Service levels are reviewed with agency IT CIOs and directors on a periodic basis to ensure that their services are delivered to meet expectations. When service levels are breached an incident will be opened and tracked to resolution.
Recommendation Summary
Service level management is critical to providing a measurable, repeatable, and accountable process and mechanism to the agency’s relationship manager to enabling communication about the delivered IT shared services.
Recommendation Benefits
This will provide the process to communicate with the agency’s business leadership to understand their business needs and demands for IT shared services. It also enables ISD to review service expectations, service costs, and communicate deficiencies and corrective actions. Service level management also provides the alignment capabilities to match the service expectation and the service delivery. Costs can be minimized when these are aligned.
Implementation Plan
Service level management has multiple processes that require integration. Careful planning and synchronization with other projects needs to be considered.
•
Plan and scope project phases.
•
Develop ITIL V3 service level processes based on the selected enabling tool.
•
Select and procure tool set.
•
Define software configuration and reporting requirements.
•
Interface with incident process.
•
Develop and procure test software.
•
Develop training materials and train process users.
•
Rollout to critical production systems and shared services.
•
Develop and distribute performance reports and publish monthly reports on the web portal.
State IT and Telecommunications Modernization—Phase 1—Assessment | 4-15
The State of Oklahoma | Capgemini Government Solutions
IT Chargeback and Cost Allocation
Overview
IT chargeback and cost allocation service provides the information on the service usage and cost to enable accurate service billing. Annual service rate updates are provided so IT budget forecasts can be estimated. The process includes activities to gather the data, report usage and costs, provide forecasts, and optimize service costs through benchmark analysis.
Recommendation Summary
Most shared service IT organizations need a thorough mechanism for service billing and service cost accounting. The level of requirements analysis is similar to outsourcing solutions.
Recommendation Benefits
Depending on the level of change required with the current Office of State Finance process, a more formal and mature solution may be necessary. A less costly commercial off-the-shelf (COTS) solution or software as a service (SaaS) may be available, reducing customization, and providing ongoing support.
Implementation Plan
This plan is a standard approach that Capgemini utilizes for outsourcing chargeback services and was adapted for this situation. Most of the tasks are similar and the effort would vary depending primarily on the level of reporting required.
•
Plan and scope project phases.
•
Define chargeback process and annual update procedure.
•
Define IT chargeback requirements.
•
Select and procure software or SaaS, if required.
•
Define software configuration and reporting requirements.
•
Develop and procure test software.
•
Develop and train users and educate agencies on chargeback reporting.
•
Rollout in parallel with the data center consolidation and server
optimization.
•
Develop and distribute reports and publish on the web portal.
State IT and Telecommunications Modernization—Phase 1—Assessment | 4-16
The State of Oklahoma | Capgemini Government Solutions
ITIL Training
Overview
The Office of State Finance and a few other agencies are moving forward with standardizing on utilizing an ITIL framework for operational and transition processes. We recommend continuing and accelerating this training. ITIL training is a requirement for standardizing and simplifying IT process supporting operations, service transition, and service design. The approach is to focus on the core processes necessary to support a centralized environment of shared services. Training can be provided via the web or on-site. Ongoing training should be a continuing initiative.
Recommendation Summary
ITIL training is required for IT service delivery process and tool training to meet the required service expectations and process improvements necessary for the IT consolidation and improvements.
Recommendation Benefits
ITIL is an international IT process framework standard that is adaptable to the State’s service requirements. It provides training materials, a standard glossary, and other leading practice materials to effectively and more efficiently improve IT service delivery.
Implementation Plan
•
Plan and scope project phases.
•
Identify course participants by role (foundations and then advanced training).
•
Examine web-based foundations classes and onsite or local advanced training courses.
•
Prepare training plan and budget.
•
Set-up web page under IT web portal to communicate ITIL and training requirements.
•
Schedule employee training for ITIL foundations.
•
Schedule employee training for advanced ITIL certification in operations, transition, and design.
•
Update and maintain knowledge base on ITIL web portal for training materials and ITIL glossary.
State IT and Telecommunications Modernization—Phase 1—Assessment | 4-17
The State of Oklahoma | Capgemini Government Solutions
Continual Service Improvement, Marketing, and IT Communications
Overview
Consolidated continual service improvement responsibility will provide the audit and service performance oversight for the ISD services. Governance over the requested service improvements must be analyzed and prioritized and this process aligned with overall IT service management. The ITIL framework provides this controlling mechanism.
As it is recommended the State have a centralized IT service organization, it is critical to maintain effective communication to the other agencies, bureaus, and offices to assist with providing information on the services available and understand the demand for new services.
Overall IT communications to the other agencies and executive branch must be centralized to improve the messaging, align with CIO objectives, and utilize standard communication methods. This will also include communications to the wide range of end users and stakeholders.
Recommendation Summary
The centralized IT organization consolidates these activities into one organization. During consolidation, new processes and procedures are required to meet agency and customer requirements. These three key activities are essential to professionally represent the consolidation of the State IT organization.
Recommendation Benefits
•
Provide consistent communications and messages to stakeholders.
•
Continually improve the IT service delivery process through effectiveness and efficiency analysis.
Implementation Plan
•
Define the activities for continual service improvement, marketing, and IT communications.
•
Develop RACI (Responsible, Accountable, Consulted, and Informed) matrix to align responsibilities and accountability.
•
Define the standard communication template, medium, and cadence calendar.
•
Define the marketing approach and techniques to engage other State agencies to utilize the IT consolidated shared services.
State IT and Telecommunications Modernization—Phase 1—Assessment | 4-18
The State of Oklahoma | Capgemini Government Solutions
Capacity Planning
Overview
Standardize a capacity planning service for the shared service applications and infrastructure services planned for FY2013. This service manages required capacity based on business drivers to meet the service level metrics. Capacity planning will monitor, collect, analyze, and report on shared service capacity usage and trends.
Recommendation Summary
Since applications will receive a due diligence review as they are consolidated and optimized, the need for the capacity planning process can be postponed until FY2013.
Recommendation Benefits
Capacity planning continually aligns the State application and shared services to the service level agreements and takes into consideration the changes in demand for these services. If the demand drops, less resources are required and can be used elsewhere or eliminated. If the demand increases, it is important to meet a higher level of service without interruption.
Implementation Plan
•
Plan and scope project phases.
•
Select capacity planning staff.
•
Develop capacity planning software requirements.
•
Define capacity planning process based on ITILv3.
•
Select software, procure infrastructure services and implement the infrastructure.
•
Train capacity planning staff.
•
Develop shared service analysis, requirements, and implementation procedures.
•
Implement monitoring and Extraction, Transformation, and Loading (ETL) collection, database loads, and automated analysis.
•
Develop standard monthly capacity reporting and outline annual capacity plan report.
•
Implement capacity planning for share services on a rotating schedule.
State IT and Telecommunications Modernization—Phase 1—Assessment | 4-19
The State of Oklahoma | Capgemini Government Solutions
4.2.2 Applications
The future vision for the State applications portfolio is the consolidation of common finance and administrative applications into a shared services model. This becomes the common framework for running the finance and administration activities across the State. It standardizes typical processes such as budgeting, fixed assets, asset life cycle management, time and attendance, training, payroll services, grant and projects, and procurement processes. These types of initiatives provide the basis for the systematic expansion of a subscription model for software as a service to State agencies with these common requirements.
There will be unique, individual agency-level requirements that are outside of the shared service model. There could also be a sub-grouping of agencies with similar requirements with unique finance and administration requirements based on their missions. For example, the Department of Corrections, the Department of Public Safety, and the State Bureau of Investigation will have unique requirements common to their missions beyond the overall State requirements. For those needs, there may be commercial-off-the-shelf (COTS) software that addresses those requirements. In the event a COTS solution is not available or incompatible with the State’s established common framework/technological standards, a common enterprise-wide application framework (EWAF) development platform with services (internal or external), and Project Management Office (PMO) functions is provided to support those needs with established integration points into the common framework of the shared services environment. It is critical that they integrate into the framework and not create application “creep”, where duplicative process and systems begin to evolve outside of the framework. The combination of good governance and standards will keep this in check. The project initiatives are meant to extend services to a broader set of agencies and standardize and simplify financial and administrative processes.
The future run rate could evolve from a financial shared service model to more of a service bureau activity for and possibly beyond State agencies. This type of initiative provides for the extending of application support model (shared services) in a broader context throughout the State. This provides the common framework that becomes the innovation vehicle for the future run state. In the future state, several things, further described below, will happen.
The shared service environment will continue to expand across the agencies as well as in capabilities to support financial and administrative processes. The learning curve will drive even more efficiencies as the processes are adopted across the agencies and become more mature, along with the use of governance. Governance drives agency needs recognition of common requirements individually, or within subsets, or at large that now become visible and can be addressed. The consistent standardization on the EWAF technology with planned obsolescence and migration strategies in place confirms cost will become measurable and predictable in support of State agencies.
State IT and Telecommunications Modernization—Phase 1—Assessment | 4-20
The State of Oklahoma | Capgemini Government Solutions
An innovation would be to expand the State’s shared service environment beyond State agencies and provide financial and administrative support to counties, cities, and others where it would be more cost effective for them to subscribe to the service, and allow the State to recoup the costs of the ISD operations by spreading it across a larger subscription base. This is not unlike the contracting of police to small cities and counties from larger counties and cities, instead of the smaller city standing their own force. The general trend in government operations is consolidation at many levels of government operations.
Figure 4-3 summarizes the costs and benefit analysis associated with the IT operations key opportunities/initiatives identified in this section.
State IT and Telecommunications Modernization—Phase 1—Assessment | 4-21
The State of Oklahoma | Capgemini Government Solutions
State IT and Telecommunications Modernization—Phase 1—Assessment | 4-22
Figure 4-3. Applications Estimated Investment and Cost Savings
Area
Initiative
Year 1 ($000)
Year 2 ($000)
Year 3 ($000)
Total ($000)
Transform Costs
Operating/ Ongoing Costs
Cost Avoidance
Hard Savings
Net Savings
Transform Costs
Operating/ Ongoing Costs
Cost Avoidance
Hard Savings
Net Savings
Transform Costs
Operating/ Ongoing Costs
Cost Avoidance
Hard Savings
Net Savings
Transform Costs
Operating/ Ongoing Costs
Cost Avoidance
Hard Savings
Net Savings
Applications
HCM Implementation
$2,678
-$2,678
$8,033
-$8,033
$10,711
$10,711
$10,711
$10,711
Applications
Pension
Applications
Budgeting
$1,310
-$1,310
$655
$655
$655
$655
$1,310
$1,310
Applications
Reporting and Analytics
Applications
Fixed Assets
$1,895
-$1,895
$10,738
-$10,738
$12,633
$12,633
$12,633
$12,633
Applications
Financials (Accounting 1/2 and T&E)
$612
-$612
$306
$306
$306
$306
$612
$612
Applications
GIS and Mapping
Applications
GRC
$1,800
-$1,800
$1,800
$1,800
$1,800
$1,800
Applications
CORE Contractor
$18,600
$18,600
Applications
EAFW
$4,056
$4,056
$4,056
$4,056
$8,112
$8,112
Total
$6,495
-$6,495
$20,571
$5,017
-$15,554
$30,161
$30,161
$27,066
$53,778
$26,712
In the applications area, savings result from net full-time equivalency reductions across agencies (due to production enhancements and automation of processes) to be determined by the State. State IT and Telecommunications Modernization—Phase 1—Assessment | 4-23
The State of Oklahoma | Capgemini Government Solutions
Key initiatives for the applications area are defined in the following subsections.
4.2.2.1 Human Capital Management (HCM) Implementation
Recommendation Summary
Given the current release level (9.0), the issues with time and attendance, and the number of shadow systems in support of HR functions, it is recommended the State consider expanding implementation of self-service and determine if the next release of HCM will provide more features and functions in support of a wider adoption of a Shared Services HCM.
Recommendation Benefits
•
The elimination of over 22 shadow systems.
•
The elimination of redundant head count.
•
Indirect savings become real when the State re-deploys/eliminates full-time equivalents.
4.2.2.2 Payroll
Recommendation Summary
It is recommended that the payroll recommendation made in March of 2009 by ISD be integrated into the HCM implementation activity to accomplish further savings beginning as of July 1, 2011 or sooner, eliminate the “Anticipatory Payroll” process, and go to a bi-weekly processing.
Recommendation Benefits
•
Standardize on leading practices for payroll processing.
•
Reduce the number of payroll runs by 25 percent.
•
Eliminate the need for agencies to perform complicated reconciliations of anticipatory and supplemental payroll costs.
•
Reduce the actual time worked before billing the federal government or other third parties.
•
Eliminate the corresponding shadow systems that support these
reconciliation activities.
4.2.2.3 Financials
Accounting Part 1 Recommendation Summary
There are many accounting systems, from small to large, in place in the State today. For agency-specific unique applications with their own financial modules, there is only a need to integrate into the CORE framework. Agencies maintaining separate accounting systems need to be consolidated and such redundancies eliminated wherever possible. The State should consider using the next major upgrade to the CORE financials and determine if the new functionality will aid The State of Oklahoma | Capgemini Government Solutions
the effort and enhance CORE capabilities to ensure a robust financial environment of shared services and reduce the number of interfaces, applications and processes.
Accounting Part 1 Recommendation Benefits
•
The elimination of over 76 shadow systems.
•
Elimination of interfacing requirements and systems.
•
The elimination of redundant IT head count.
•
The indirect savings become real when the State re-deploys/eliminates full-time equivalents engaged in support activities.
•
A single repository data schema enhances Governance, Risk, and Control (GRC) processes.
Accounting Part 2 Recommendation Summary
Applications for the balance of the non-CORE areas are to be incorporated into a EWAF, including the staffing, development, and maintenance of all non-CORE financial and accounting applications previously noted (i.e. HCM, budgeting, financials, and fixed asset initiatives). These applications comprise the remaining 764 (+/-) applications noted as agency-specific applications (i.e., child support, tax, professional licensing). There are also a number of older legacy applications built for agency-specific needs with their own financial modules.
Key points to note with this recommendation are listed below.
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Buy vs. build analysis is recommended as the replacement option if the COTS product fit addresses the agency’s needs, typically in the 75 percent + range.
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If build is necessary, use the EWAF platform standards to ensure the applications integrate into the PeopleSoft CORE framework.
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Given the age of some of the State’s systems, a strategy needs to be in place to replace/integrate applications. In particular anything that is on a mainframe (legacy applications) needs to be prioritized first.
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It was noted that the State is in the process of acquiring a COTS tax solution for income and sales tax. It is recommended the State look at expanding the solution, if it is not too late in the award cycle, to encompass more than income tax and sales tax processing and consider a revenue shared services approach.
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Note there is an interrelationship between these applications and the CORE shared service recommendation in the Accounting Part 1. As CORE expands and replaces financial components, the number of these applications declines proportionately to the adoption of shared services by the agencies. Based on previous experiences with widespread adoption of shared services, elimination of applications in a ratio of 2:3 can be expected. For example, the elimination of an agency revenue (accounts
State IT and Telecommunications Modernization—Phase 1—Assessment | 4-24
State IT and Telecommunications Modernization—Phase 1—Assessment | 4-25
The State of Oklahoma | Capgemini Government Solutions
relievable) application and 2 interfaces to integrate into the CORE environment represents a ratio of 1:2; there are no interfacing requirements in CORE accounts receivable. Therefore, the total number of applications in the future state would be in the range of 400 to 700. This assumes 1,500 applications with an average 1:2 ratio, resulting in 500 applications in the “to-be” state with widespread adoption by the agencies.
Basic assumptions on CORE integrations with EWAF include:
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CORE is the single foundational basis for the HCM and financial
framework for the State.
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CORE has application program interfaces (APIs) embedded into the major applications (e.g., Accounts Payable, Accounts Receivable).
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CORE handles most financial aspects when fully deployed throughout the agencies.
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CORE is not designed to handle unique agency requirements.
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CORE supports generic finance and administrative activities and processes wherever possible throughout the State.
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CORE is updated to the most current release level, and maintained going forward on a standard major upgrade path time line, typically 18 to 36 months.
Basic assumptions on EWAF include:
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Agencies share commonality often in subset groupings; these are all candidates for shared services or EWAF platforms:
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Payment processing.
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Licensing and fee activities.
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Training.
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Accounts receivable.
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Document imaging.
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Geographic Information System (GIS).
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EWAF encompasses commonality by the processes.
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Grouping by commonality for data warehousing initiatives.
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Grouping by commonality for business intelligence and analytical tools.
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Shared automated tools, workflow, content management, and portals.
It is recognized that some agencies will have requirements specific to the agency. In this model, these discrete COTS/custom built systems need to leverage CORE/EWAF where it is appropriate. For example, a payment is a payment, no matter how it is authorized. The specialized requirements for the agency-specific applications are to enable the authorization and transmit the payment instruction to CORE or other shared services applications and not replicate the payment process. The State of Oklahoma | Capgemini Government Solutions
Basic staffing assumptions relative to EWAF:
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Establishment of centers of excellence on the common framework as needed.
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Pools of functional rich talent to perform the necessary analysis.
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Must be led by senior application architect(s).
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Must be staffed by senior and junior business analysts, in shared pools and interdisciplinary skills sets for analysis gathering, refinement, and recommendations.
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Cross pollination of skills within talent pools is critical to the success of this model as bot